Asset-Based lending via a secure distributed platform

Abstract

The advent of mobile money in Kenya has accelerated the development and deployment of financial inclusion products for the previously unbanked or under banked population. However, the focus on cash loans to individuals has not been directly matched with an increase in lending to small and medium enterprises (SMEs) that operate in the informal economy. For the majority of SMEs in Kenya and Sub-Saharan Africa access to lending products as a business remains limited due to high cost associated with risk uncertainty, lack of appraisable collateral, and incompatible loan size. This has resulted in Sub-Saharan Africa having the lowest lending utilizations for SMEs worldwide. In this note we describe a distributed platform aimed at easing the offering of financial products to SMEs by integrating stakeholders in the retail trade sector in Kenya. The note covers the framework of the system and the design criteria used to develop the technology including the utilization of a blockchain backend built on hyperledger fabric and mobile phone applications for stakeholders to engage with system. Lastly, we describe the intended usage and pilot study for deployment and testing of the technology platform.