4G Capital, Kenya
Lack of access to finance is a major issue for entrepreneurs and small
businesses across Africa. According to a report by charity Graça Machel Trust,
71 per cent of female entrepreneurs in East Africa had to use personal savings
to fund their startups, due to an inability to raise capital. Many Kenyan banks
are hesitant to lend to smaller, untested businesses, because of a government
cap that limits the interest charged on loans.
4G Capital, a Kenyan microfinance startup, has partnered with Canadian
blockchain securities exchange Finhaven to launch the continent’s first
tokenised bond issue using cryptocurrency. By offering these tokens to
investors, the company hopes to raise $10 million and bypass the high cost of
conventional bond issuances.
Thanks to the underlying blockchain technology, 4G will be able to
effectively raise capital and scale operations. This unique partnership will
bring much-needed US dollars into Kenya and provide capital for small and
medium-sized enterprises (SMEs), with Finhaven saying investors will receive
the same level of protection as they would expect when investing in a
If the issuance proves successful, 4G Capital is on track to lend $40
million over the next 12 months alone and directly impact more than one million
people through its services by 2020. The company also provides financial and
business training to SMEs, alongside working capital, in a bid to help end
the poverty cycle that threatens low-income Kenyans.
Digital AML, Denmark
Denmark consistently ranks as one of the most financially transparent
countries in the world and, according to the Corruption Perceptions Index, has
been in the top four least corrupt countries for more than 20 years. Yet, a
number of recent cases involving major Danish financial institutions have
highlighted the challengers this country still faces around money laundering
and financing terrorism.
Danske Bank, Denmark’s biggest lender, admitted that money laundering
and other illegal practices had been discovered around payments from
Azerbaijan’s ruling elite and Danish newspaper Berlingskereported
that Nordic bank Nordea’s Danish branch was used to transfer money to
Danish startup Digital AML was founded in 2016 to ensure that
companies can effectively meet the requirement of the 2017 Money
Laundering Act and reduce incidences of money laundering. A key part of the
legislation requires Danish businesses to know exactly who their customers are
and be able to verify their identity. Digital AML links publicly available data
with customer data, such as a unique corporate registration number, to confirm
the customer is who they say they are.
The solution also continuously monitors changes in the public data and
if there are any signs that a company is involved in either money laundering or
terrorist financing, Digital AML warns its customers, giving them the ability
to investigate further. Before this, companies would have needed individually
to check customer data against public data, such as the European Union
sanctions list and politically exposed person lists.
Traditional banks in Mexico have found it difficult to engage with their
customers and provide top-level service. According to a Gallup survey, only 35
per cent of Mexican bank account holders say they strongly agree that
their bank has great products and services that truly meet their financial
needs, leaving innovative fintech companies well positioned to fill
Poor service isn’t the only challenge facing bricks-and-mortar banks as
less than half of Mexicans have a bank account, with many unlikely to open one
soon, partly due to the low number of physical bank branches and because it
takes an average of around 42 minutes for rural Mexicans to travel to
The Mexican government launched a financial inclusion strategy in 2016,
which highlighted the importance of leveraging technology to support unbanked
citizens. Albo, a smartphone app offering banking services, gives users the
ability to make payments with a connected Mastercard in-store and online, and
see transactions in real time.
The benefits of solutions such as Albo are significant in a country like
Mexico, where smartphone ownership rose to 35 per cent in 2015. For example, if
a user forgets their PIN, instead of having to make a lengthy trip to a branch
or wait days for a new number to be posted, they can instantly change it within
Fintech’s full potential in Mexico is expected to be seen in a decade,
with fintech startup accelerator Finnovista forecasting these solutions
will control close to 30 per cent of the overall banking sector in
Japan is a nation of savers, but unlike many Western economies, cash and
bank deposits are preferred far more than investments. In Japan, stocks and
investment trusts represent only 19 per cent of household financial assets,
according to the country’s Financial Services Agency.
A lack of comprehensive financial education is believed to be partially
responsible for the aversion to investment products, with a new range of
robo-advisers looking to make it easier for people with limited financial
knowledge to invest.
WealthNavi, Japan’s largest robo-adviser service, asks users a simple
set of questions about their financial goals and the level of risk they are
willing to accept, then a sophisticated artificial intelligence algorithm
invests their capital without human intervention. Throughout the investment
period, users can monitor their funds on their smartphone and see simulations
of where the investment should be over a number of years.
Fewer than half of Japanese people, who are aged 20 to 29 and live
alone, have any investments or savings, creating major challenges for many in
this group when they approach retirement age. The introduction of online and
mobile platforms that facilitate the quick and undemanding investment of
relatively small amounts of money will appeal to digital-native
The low cost of services such as WealthNavi is showing Japan’s savers
that investments are not just limited to wealthy individuals or those with
in-depth financial expertise and it only takes minutes to agree a long-term
African economic powerhouse Nigeria has a thriving ecommerce sector that
is set reach annual revenues of $75 billion by 2025. But the prevalence of
cash-on-delivery orders and a complex payments ecosystem has restricted the
growth of this industry and left many smaller businesses unable to establish a
Lagos-based startup Paystack is working to remove barriers stopping
African companies from accepting online payments, through products such as the
Paystack Payment Page. Thanks to the simplicity of this solution, even
companies that don’t have a website can create a secure ecommerce checkout link
in seconds and receive payments from around the world.
Tools like this are especially vital in Nigeria, where the informal
economy accounts for 65 per cent of GDP. Merchants across the continent
are able to share their own payment pages on many different platforms by
embedding the link into WhatsApp Stories, sharing via SMS or even including it
in their Instagram profile.
Only around 1 per cent of transactions in Nigeria are currently online,
but Paystack hopes to power a range of innovative companies that will drive
forward not just ecommerce, but also the next generation of mobile-based
“These are only a few of the ways Paystack has deployed fintech
innovations to solve local issues. Such innovations are why Paystack has grown
quickly in only two years to power 15 to 20 per cent of all online payments in
Africa’s largest economy. And we’re only getting started,” says Paystack chief
executive Shola Akinlade.
here for the original article form Raconteur.