Innovation: Using ‘blockchain’ to extend micro loans in Kenya
The Innovation of the Day from trendwatching.com 
Twiga Foods in Kenya, a platform helping farmers distribute produce to food stalls, partnered with IBM to extend microloans to stall vendors. IBM created a system to help these sellers receive credit scores; a machine learning algorithm analyzes their mobile purchase records and calculates a credit score. The end-to-end lending process is then managed via a blockchain-based system and executed via mobile devices and SMS. The pilot saw 220 loans made, with the average loan of USD 30 being extended for 4 to 8 days. The initiative is set to be expanded across Africa by the end of the year.
In case you’re not fluent in the benefits of blockchain, here’s a one-sentence crash course: It allows users to keep and view fully transparent, unchangeable records. As a result, blockchain is being used to bringing new levels of trust and transparency to various activities: Agora’s voting system transformed Sierra Leone’s elections, the first blockchain university is upending how higher education has typically worked, while consumers can monitor their chickens in China to make sure they’re truly free-range.
And don’t miss the bigger picture: new forms of trust and transparency change everything by empowering endless new players to enter the market. Individually these suppliers might be small but collectively they can reshape entire industries thanks to their unprecedented ability to cater to every customer need, no matter how niche. Just ask those in the retail industry (eBay and Alibaba), the media industry (YouTube) and the travel industry (Airbnb).
So, if it’s not too big a question for this early morning email (!) ask yourself: what steps is your brand taking to enable more suppliers to enter your industry? Because if you’re not empowering new entrants, then someone else soon will!
Tags: innovation