The loans are intended to help farmers purchase supplies that will maximize their agricultural output.
Blockchain-based mobile financial services platform Wala and its native Dala token have formed a strategic partnership with Block Commodities, an African commodity trader, and FinComEco, a financial and commodities ecosystem, to provide sub-Saharan farmers $10 million worth of loans in the form of crypto tokens.
The loans are reportedly the first initiative in a series of projects that will target the development of the sub-Saharan agricultural commodity market.
50,000 small farmers spread across Uganda, South Africa, the Republic of Congo, Malawi, Zambia, and Zimbabwe will receive loans, which are intended to assist in the purchase of fertilizer. If all goes according to plan, the fertilizer will allow farmers to maximize their outputs; at the same time, the partnership will provide blockchain-based tools to track their commodities.
Chris Cleverly, CEO of Block Commodities Ltd., believes that the initiative is “a giant step in the right direction to tackle and solve the financial inclusion problem that impacts half the world’s population,” adding that blockchain technology presented the opportunity for a “potential reset for finance in Africa.”
This partnership is only the latest for Wala, which has made an effort to develop services for independent merchants and small businesses in the past. Wala has already partnered with two platforms for small business owners across Africa: mobile point-of-sale service Mvendr and e-commerce management platform Spazapp.
Both of these partnerships that have allowed Wala users the opportunity to cash in and out with Dala tokens at more than 100,000 merchants across the continent.
A revolution for the unbanked
The innovations and digital payment and financial storage solutions have been making waves around the globe, but their impact is perhaps the most powerful in places like rural Africa – parts of the world with extremely limited financial infrastructure.
In a piece for CoinTelegraph, writer Darryn Pollock described what he calls crypto’s ability to “leapfrog” Africa into the future. The “leapfrog” phenomenon is demonstrated with the evolution of the telecom industry in Africa; the infrastructure necessary to support landline telephones simply never reached much of the continent. However, many of the same areas that were inaccessible for landlines now support an abundance of mobile telephone services.
In the same way, traditional brick-and-mortar banks as they exist in European and North America are unsuited to large portions of Africa. There are large swaths of that simply don’t have the transportation and building infrastructure to sustain banks the way that people in the ‘western’ world think of them. However, mobile banking solutions and other mobile financial services (like cryptocurrency wallets and exchanges) are expanding at unprecedented rates.
As some African countries have descended into financial crises, some residents have also turned to Bitcoin or other cryptocurrencies as a safe haven for their savings.
In any case, the African cryptocurrency market is full of opportunities for entrepreneurs as well as users. Wala CEO and Founder Tricia Martinez said that “in agriculture, retail, enterprise and other industries, partnerships like these are helping us move consumers throughout Africa closer to financial prosperity, eliminating the traditional gap between consumers and financial service providers.”