Afrigather This text was contributed to TechCabal by Conrad Onyango through bird story agency.
The latest announcement by Opera MiniPay that it had signed up over a million customers in Kenya, Nigeria, and Ghana simply 5 months after its launch is the clearest indication but of the rising recognition of decentralised finance, or DeFi instruments, throughout the continent.
“MiniPay makes it simpler and extra reasonably priced for people throughout Africa to accumulate, ship and obtain Mento cUSD stablecoins – just by utilizing cell phone numbers,” mentioned MiniPay’s product director, Charles Hamel.
MiniPay is a self-custodial pockets for greenback stablecoins that gives cUSD, a stablecoin constructed on the Celo blockchain, and touted as “decentralised” in order that its worth is linked to a wide range of currencies, which makes it extra steady.
Hamel defined not too long ago on the Africa Tech Summit 2024 that the cost platform was built-in into the Opera Mini browser to offer African customers with a extra steady option to retailer and ship cash utilizing digital property.
The transfer to decentralised finance in Africa is being pushed by the double-whammy of excessive inflation charges and battered currencies.
In response to MiniPay, the cUSD affords a number of benefits, together with mitigating foreign money volatility and offering a dependable retailer of worth.
“That is particularly essential in areas affected by hyperinflation and financial uncertainty, the place stablecoins current a decentralised and accessible different to conventional monetary companies,” the cost platform mentioned in a press release.
Extreme foreign money volatility throughout Africa has disrupted among the continent’s strongest currencies together with the Nigerian Naira and Kenya Shilling – each now thought of among the many world’s most undervalued currencies.
In response to Bloomberg information, the 2 currencies featured in a listing of 10 that skilled probably the most devaluation in 2023, globally.
The Naira was ranked the third most devalued foreign money on the planet after shedding 55% of its worth in opposition to the greenback, whereas the Kenya shilling misplaced over 20% in opposition to the dollar in 2023.
The Angolan Kwanza (-39%), Malawian Kwacha (-39%), Zambian Kwacha (-29%), Burundi franc (-27%), Congolese franc (-24%) additionally featured among the many world’s 10 worst-performing currencies.
A number of different DeFi-backed startups in Nigeria and Kenya are getting observed by buyers.
Canza Finance, a Nigerian Web3 Neobank that helps African startups with cross-border funds raised $2.3 million in January 2024 to broaden Baki – its African DeFi platform.
“With the assistance of Baki and stablecoins, Canza Finance goals to help companies in attaining greenback stability and overcoming conventional foreign exchange challenges. This can finally end in decreasing transaction prices to only 1%, making it simpler and extra reasonably priced for companies to conduct cross-border transactions in Africa,” mentioned Canza Finance in a press release.
Canza has ambitions of Baki constructing the world’s largest non-institutional monetary system.
“Baki gives the power to supply infinite liquidity on the official conversion charge, and natively quote property in native currencies on chain,” Baki’s web site states.
One other DeFi startup, Jia, in Could 2023 secured $4.3 million in seed funding.
Jia, which can be taking a look at increasing the corporate’s operations in West Africa and Kenya, specialises in providing loans of as much as $5,000 to small companies to fill the hole left by different digital lenders and mortgage apps that often don’t provide credit score exceeding $1,000.
A bunch of affiliated DeFi organisations, the Africa DeFi Alliance, goals to deploy $100 billion in working capital to assist shut the African MSME Funding Hole. Their objective is to offer MSMEs with capital that’s ten instances cheaper than immediately’s business charges.
“We imagine that by uniting the various stakeholders in Africa and past who can unlock working capital to African MSMEs, we are going to actualise a future the place an open infrastructure drives progress for distributors and extra companies at scale,” the alliance says on X.
In response to the World Financial institution, SMEs which account for 60% of jobs in Africa face an enormous finance hole of $330 billion.
