In preparation for my last post I watched the Augur presentation from Devcon1, which in turn led me to watch quite a few other videos from that event. There was one video in particular that really stood out for me and that was, ‘Ethereum The African Opportunity‘. Presented by Wayne Hennessy-Barrett, CEO of 4G Capital it’s an absolutely fascinating view on the potential impact blockchain technology could have in Africa. Without doubt one of the most exciting visions I have heard in relation to the blockchain, I recently spoke to Wayne to find out more…
What is your background and how did you first get involved in this space?
WH-B: I was headhunted by an African consumer finance company in 2012 from running a specialist management consulting firm in Jersey, Channel Islands. A previous career in the military had exposed me to a lot of global development issues, and there was always an interest in emerging technologies and how they could help solve real world problems. Consulting gave me a great grounding in looking at business opportunities from a first-principles approach, to really understand the fundamentals of how value was created and where vulnerabilities and opportunities lay. I was very fortunate to have a lot of management and leadership experience before that, working alongside some of the very best in the world. I’ve always loved building high performance teams of people to do things generally considered ‘too hard’!
4G Capital is a micro-investment business based in Nairobi – can you give us an overview of how the company currently works?
WH-B: We provide very short term loans for informal market traders to grow their businesses, and support them with advisory and training services to give them the ways and the means to succeed. We’re about half way through our current funding round, and very excited to have been shortlisted for the Intellecap Impact Investor Sankalp Forum, a very important impact investment platform, running over 24-26 Feb 16. The Intellecap team have been incredibly supportive to us here in Kenya, and bring global networks to emerging market opportunities.
What does a typical 4G Capital customer look like and what impact can the loans have on their daily lives?
WH-B: Our customers are self employed traders and micro entrepreneurs in rural and urban markets. They are highly resilient, enterprising and fantastic people. They work incredibly hard to support their families and build a better life. But they generally lack access to lines of business credit on the terms their businesses need, which is where we come in. About 65% are female, about 40% below the age of 35, with the majority working in agri-related goods. We occupy a different space to banks and other credit providers, who fill other important roles in the market.
M-Pesa has been in use for 9 years now. Was this one of the key factors of basing 4G Capital in Kenya?
WH-B: Definitely. Kenya’s foresight in embracing the mobile money revolution has led the world in this respect. It is one of a number of factors that makes Kenya a fantastic place to do business, along with superb people, well developed and diversified internal markets that continue to grow and a supportive governmental approach to innovation.
How do you see blockchain technology – and in particular Ethereum – fitting into the process?
WH-B: Blockchain technology has the potential to pass real value to consumers and customers alike with a secure yet transparent architecture. As the ecosystem matures and develops I can see it adding value from a global remittance perspective (say the international movement of investment funds in a faster, cleaner way than before), and at a different level for customers to see how pricing and terms work so they understand what they’re buying.
I don’t see Ethereum or bitcoin acting as an alternative to national currency systems like M-Pesa within internal markets, where there are important reasons for people, company and governments to be on the same page. Part of our social mission is to help our customers transition from an informal to a formal existence and to support communities and civil society, and this means supporting local currencies and systems.
WH-B: I can see a more connected blockchain world developing as adoption picks up, where brilliant developers like the guys you mention (and several others, such as Epok), create tools and services that benefit people. We are supporters of the ID 2020 initiative that seeks to give people around the world ownership of their digital identities, and the MIT Media Lab is also doing incredibly important work in Mexico and elsewhere to consider how digital and crypto-currencies can help with financial inclusion.
From a 4G Capital perspective, wouldn’t it be amazing if one of our customers (say a working mother, sourcing coffee or tea from farmers) in Kenya could use her positive credit history with us to demonstrate to the world that she’s a solid investment? That data could provide a start point for Jessi Baker’s Provenance supply chain tracker to make her attractive to fairtrade businesses around the world.
That customers interaction with both 4G and Provenance could then contribute to the Augur prediction toolset to endorse her reputation and thus credit worthiness….giving her greater access to other goods and services in the market. Other applications, like Epok, could support this customers access to the global economy by helping buyers and sellers convert her M-Pesa / national digital currencies and help create mutually supportive international markets.
We’re talking about reclaiming globalisation and doing business the way it was meant to be: a shared value model that grows individual wealth and drives human development everywhere.
Last year you sponsored the first Nairobi Ethereum meet-up? How did that go?
WH-B: We had a fantastic response and now have almost 70 members in the Ethereum Community East Africa and growing! There’s an incredibly talented and vibrant iHub and tech dev community here in Nairobi with really important coding accelerators like the Moringa School. The hunger to embrace and create new tech in Africa is strongest in Nairobi, and Kenya is the gateway to some incredible markets in East and Central Africa with millions of potential customers. We are facilitators in this process, as the talent drives itself.
What are the next steps for 4G Capital?
WH-B: We want to play our role to support the Kenyan and wider African trajectory. The opportunities here are stellar if companies look at African countries as amazing markets with real customer problems to be solved, rather than merely a menu of commodities to be extracted and exported. There is a potential continental market of almost 500M people with rising access to communications and ICT. They see the world around them, and want and deserve a better life and future. There is huge innovation and genuinely humbling levels of commitment and human spirit in the face of real adversity. So next steps see us closing our current investment round to scale across Kenya before moving to other African markets where we can be of service. We want to build on our understanding and continue to innovate and develop relevant products for relevant problems and play our part as effective value creators.