It has been discovered that a third of the world population is poor and unable to meet their financial needs. A larger percentage of these poor people are from developing countries e.g. countries in Asia and Africa. Researchers have also shown that people from these areas, especially in Africa live on less than $1.25 daily. There being poor is not because of laziness, it is largely because they have little or no access to financial services.

50% of the populations coming from countries in Africa and Asia are unbanked. Many of them do not have appropriate documents or paper works, so they are deemed ineligible for banking or financial services. Many are in rural areas and do not have access to banking facilities. Banks cannot be established in rural areas because of the cost of setting an infrastructure in such a long distance from civilization.
Many of these poor people have dreams but lack the adequate financial backing to execute these dreams and achieve them. They have the desire to get the education but lack of finances break these desires and turn them to mirage. When they go to banks or financial service providers to get loans or financial services they are faced with multiple challenges:

• Lack of appropriate documents or paper works (e.g. proper means of identification)
• Lack of collateral
• The cost implication or charges are exorbitant

Developed countries have come to the rescue to provide financial assistance to developing countries but these assistances are insufficient because of the slow pace of development of the developing countries.

L-PESA

L-PESA leverages the blockchain technology to provide lendings with transparency and efficiency.

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L-Pesa creates blockchain-based, smart contract loans enabling people across the internet to grow their businesses and become thriving entrepreneurs.Hopeful visionaries can take loans in Ether or Bitcoin and then participate in L-Pesa’s curated marketplace facilitating peer-to-peer lending: the first crypto loan service in Africa.

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L-Pesa is a financial service provider that is into providing microfinance services. The aim is to make credit and related financial services accessible to those who need them thus improving people’s lives. Students can get loans to finance their educational dream. Small and medium scale enterprise can get loans to execute business for maximum returns through L-PESA. L-PESA has been into the business of microfinancing in many African countries via the Fiat currencies in the past but they have been faced with the challenge of high operational cost which has limited the provision of loans for the poor who need them most. They have also been limited in terms of reach when working with the Fiat currencies.

They have recorded a lot of successes providing loans with the fiat currencies but with the inclusion of the blockchain technology, it will reduce the operational cost and expand its reach. With the blockchain technology, L-PESA is able to not only expand its reach but make financial services available to those who need it or those that are not served by the bank or microlenders.

The Platform

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L-PESA allows users to gain access to loans while attaching a credit score to their profile as they repay their loans according to schedule. L-PESA allows users to get small loans at first (say 1$) and as they repay the loans on schedule, they are given access to higher loans. Successful repayment of loans will lead to a higher credit score. The increase in credit score also depends on other factors one of which is the completion of verification process. The credit score are used as a transparent means of giving users higher loans on the platform. This will encourage users on the platform to repay loans on schedule because the higher the credit score the higher the loan they get access to.

Token Details and ICO

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For further information on L-PESA, you can read:

Website

Whitepaper

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Twitter

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