In last weeks’ article I touched on the steps you can take to start your own business venture. Judging from the feedback received there are many people who want to start their own venture for various reasons.
As the country celebrated its 39th birthday last week I took time to take stock of developments in the start-up ecosystem in Zimbabwe. Tech Hub is a member of this growing ecosystem that is young but eager to create new start-up ventures to solve some of the challenges facing the country. I reflected on some of the low hanging opportunities that can be solved through the use of technology.
The formation of new ventures should be encouraged by authorities as it helps create jobs and solve some of the challenges in the economy. Solving challenges doesn’t happen on its own as my meeting with a few start-ups at last weeks’ Tech Hub Wednesday Networking meetings showed me. I had the chance to meet some promising young start-up founders who are working in the Fintech space in Zimbabwe and creatively using blockchain technology to build their solutions.
Our discussion centred on financial inclusion, which as you might be aware is a topical issue these days with many people seeking to make and receive payments quicker and at an affordable rates. The use of technology in this space has the potential to unlock many gains. It’s great to see that some of our very own young people are embracing the power of technologies such as block chain and the internet to create home grown Fintech solutions.
More work needs to be done in the space and so it is important to understand the components of successful innovation in the Fintech space using the internet and related technologies. Due to the mystery surrounding blockchain we will spend some time trying building solutions to some of the challenges facing our country and our continent in general.
What is blockchain technology anyway and why is it so hyped up? Is it a fud? Blockchain is the technology behind the well-known Bitcoin, cryptocurrency. Until recently I was not aware of the power that this technology might have in our country where trust is an issue in a number of areas. It is important therefore to unpack some key use cases of this technology especially at this time where price stability is an issue and the currency is weak.
At the heart of blockchain technology is information, lots of it and how it is accessed and used. Think of it as a large database that is spread on many computers but no-one person can change records on the files without permission or without being made out. This information is stored in blocks across many computers. The information can be viewed by users but is not centrally controlled by anyone. Once the information is posted onto the ledger it cannot be changed by anyone. With blockchain two parties can transact directly without a middleman, and this is great because it cuts transaction costs.
Reading the explanation of what blockchain is and what it can do, one finds ready application in a lot of cases in Zimbabwe and indeed the rest of Africa. Let us go through some of the challenges facing a number of countries in Africa, Zimbabwe included and see how block chain can be used to solve them.
- High remittance costs
- Weak currencies
- Low financial inclusion
- Lack of trust between or among people wishing to transact
- High counterfeiting
- Revenue leakages
- Non-transparency in contract negotiation and execution
- Trading of precious metals or trade finance in general
- Side marketing of crops in contract arrangements
Our explanation of blockchain is rather simplified and this is deliberate! We are simply focusing on the things that are necessary to know and hopefully this will encourage wider adoption of this technology. Many a time financial systems have failed and inconvenienced users. We can all relate to this. This is why new technology is required and must be adopted to help bring convenience to consumers.
Let us dive into why blockchain will work in solving some of these big challenges we are facing.
Data that is recorded on the block chain ledger is usually unchangeable. This is by far the most important part of the blockchain technology, which allows transactions which war posted on the ledger to be considered as transparent and trusted. One of the biggest challenges faced by Banks in Africa is ensuring that they are dealing with bona fide clients who can be located and verified.
I see a strong case for the use of blockchain in registering and giving out identity cards that can be used by people who often cannot access banking services because they don’t own a property and so cannot be verified as being of a fixed abode. This is by far the biggest challenge limiting the ability of many people to access banking services across Africa.
Using the blockchain is not that simple though and this is why more time needs to be spent creating solutions around the identified challenges. For starters blockchain is considered a new technology and one that is understood by very few people. In fact the people who should be authorizing their teams to use this technology are usually the least knowledgeable in many organisations. This why Tech Hub Harare is focusing on creating discussions and sandboxes to help develop some of these solutions in Zimbabwe and encourage their adoption.
The starting point for anything new is to try it out under a controlled environment and learn. This is called experimentation.
We encourage experimenting at all levels including communities and corporates. At Tech Hub we are experimenting with blockchain in general focusing on solving some of the challenges highlighted above. If you would like to join our platform and wish to contribute to these initiatives we would love to hear from you.
Contact us via our email address hararehub@gmail. com or visit our website www.cowork.co.zw.