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Nigerian Blockchain Startup to Improve Cross-Border Money Transfer in Africa

A new Nigerian blockchain startup, Kora, has revealed its intention to leverage on the blockchain technology to achieve low-cost money transfers across borders within Africa and beyond. This was announced by the founder and CEO of Kora, Dickson Nsofor, who stated that the initiative is borne out a need which arose while he was working in the United States owing to the fact that he found it difficult to transfer money to Nigeria while away. The CEO stated that;

“It was faster to drive cash to Ghana than to transfer money using a digital channel. And I thought to solve this problem.”

With the instrumentality of the blockchain system, the brains behind the Kora firm have been able to discover a means of reducing the time it takes to make financial settlements. From March 2018, Kora’s remittance service has been going through testing and improvements based on the fact that the project is slated for launch in September 2018. Dickson Nsofor stated that his team has also nursed the intention to include more services to the announced one sometimes in the future.
At the moment, it appears the firm would be targeting people who are not captured in the traditional banking system and those living in the underserved populace. They also have plans to gear their services towards the unbanked people in Africa. However ingenious this sounds, some people are unbanked for various reasons, poverty, illiteracy and the remoteness of the environment, how the firm proposes to achieve this thereby accommodating them in its system was not revealed.

Regulation of the Blockchain Technology

The company while focusing primarily on payment is quite optimistic that the blockchain technology can be a ready tool to empower people and to move sectors such as insurance, loan service towards digitalization. Also, the firm has continued research into other ways the blockchain potentials can help solve problems in Africa. Kora has also revealed its token system which is to serve as an incentive for users using its platform to transfer funds.
It is a known fact that there is a cloud of uncertainty hovering around the regulation of cryptocurrency in Africa at the moment. A report made by the Afro-centric bank, Ecobank described the approach of most African government towards cryptocurrency and blockchain technology as a “wait and see” tactics. Nigeria is definitely on the list of these governments.
Despite these regulatory challenges, the CEO further opined that the blockchain system which has been tested, trusted and adopted around the world has a lot of potentials and that businesses and regulators should not despise the “digital messiah.” Accepting and embracing the technology he said, would debunk the misleading belief of slow technological adoption in Africa.
In a bid to popularize the use of the blockchain in Nigeria, the founder stated that his company is driven by an unquenchable thirst to support any blockchain project initiated by the Central Bank of Nigeria. Nsofor holds the opinion that there are glaring needs to experiment with the blockchain technology considering its local relevance in all sector of the Nigerian economy.
According to him, it is no gainsaying that he naivety or lack of requisite knowledge of the blockchain system by the African government could be premised on two significant factors which will cause Africa to miss on the opportunity of accommodating the technology into its system. It is for those major reasons the founder wants African government to allow and try exploring the potential of the Distribution Ledger Technology (DLT).
The Head of Operations in Africa at Kora, Gideon Orovwiroro, shares the same sentiment with the Founder as he also believes that the most significant hindrance to the adoption of the technology aside lack of requisite knowledge by the government is effective regulations, he revealed this in an interview with Techpoint.Africa, saying:
“A lot of African governments would rather adopt the sit-and-look approach, as opposed to being proactive which is keeping the continent back.”
The firm also expressed its keenness to partner with interested money operators, licensed mobile transfer operators, businesses in the financial sector and the commercial banks. Kora’s intention for working with them is to rely on the various regulatory framework that the different organizations have developed over the year while they wait for proper blockchain regulation as an Act as a delegated legislation from the Central Bank of Nigeria.

Why Choose Africa?

Nsofor noted the fact that there are no African Internet billionaires was a major factor why Africans seems to be late bloomers in the Internet bubble at inception, and this seems to be one of his major drives as a blockchain enthusiast cum entrepreneur to champion this course to the stage of massive adoption in Africa.
In May this year, the Kora Network was able to amass a staggering sum of $12 million in an initial coin offering (ICO). Judging by the nature of money transfer infrastructure that Kora intends to develop, their target is become “the first $5 billion tech startup in Africa” within its first years of launch. It was also emphasized that the aim of the firm is not just; “to have a major stake in the financial service market” in Africa as the firm might delve into controlling micro-insurance, microcredit and credit scoring, just to mention but few.
The Firm’s plan is to make sure that Africans enjoy what an efficient financial communication truly is and establish a financial connection without currency or distant barrier. Aside from the fact that the numbers of Global Internet companies that have developed a payment features have drastically increased which shows their interest in the African market, Dickson Nsofor sees this development as a welcomed development. He is also optimistic that his company would favorably compete with these other financial institutions.

“The end goal is to be the leading Pan-African digital banking solution provider from Africa by 2022. We want to be controlling payments, remittance, and digital banking across the continent.”

This innovative establishment by Dickson Nsofor is no doubt significant move which has brought the country out of oblivion, thereby placing it on the world map as far as blockchain technology is related, perhaps in the future, Africa’s level of adoption would increase, but at the moment, it is relatively low. It is crystal clear that adoption in most cases is usually followed by the regulation, Africa might have to adopt first before considering how to curb excesses.

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