The difficulties of Banks in Africa
Banking in Africa is difficult. That is putting it lightly. Since the post-colonial era of Africa (1960s-1990s), when the African states got rid of their colonial masters, one of the biggest problems the countries faced was banking facilities and infrastructure for them. This is now a common problem. At one point or another most countries on the continent had financial crises, some only once off and then stabilized. For most this was an on and off recurrence with some being in financial crisis largely caused by poor banking facilities and planning even till today. cough zimbabwe cough.
Although one could very well show how many of the financial crises across the continent had major exogenous influence and involvement and that is a contributing reason. However, a very big reason itself is the banking systems in the countries. If one cannot make a bank account, send or receive money, take out a loan, or even be allowed access to specific banking services then how can an economy grow? If the people are not allowed to even store money in a safe space or receive money without questioning then how can enterprises and small businesses get the funds to grow?
To put the situation into perspective here are examples of banking troubles in Africa from both past and present:
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Most African countries have a bank interest rate of 7% or more:
An example of the African countries which fall under this are Ethiopia, Kenya, and Burundi. To name a few. For some African countries, like Malawi, interest is 14% or Zimbabwe where it is 80%. This means that in Zimbabwe if you borrow 1000USD you need to pay back 1800USD in the first year not even counting the second. No small business or even large-scale business would want to start or build in a situation like this.
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Western and some central African countries do not have their own currency but use the CAF (Central African Franc):
Since their independence between the 1960s and 1980s, these central and western African countries willingly or unwillingly adopted CAF. This means as the economy grows the banks have to ask permission from France in order to progress. So they are constantly capped as a result. This includes countries like Chad, Burkina Faso, Mali, Cameroon and quite a few others.
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Some African countries which have their own currencies routinely drop their own currencies for foreign ones. Officially or unofficially:
The Democratic Republic of the Congo unofficially uses the US dollar in all sectors of its economy, especially its mining deals. This is terrible since it is the most resource-rich country in the world and none of the money exchanged strengthens its own currency. Zimbabwe is the worst case here. Zimbabwe’s native currency, the Zimbabwean dollar, is not internationally recognized and is only in circulation nationally. This currency underwent, at its best, hyperinflation.
There was even a 100 trillion Zimbabwean dollar bill which was equivalent to 0.40 USD. Its central bank essentially died as it adopted 8 different currencies none of which were its own. In the last two years, it has switched twice from the US dollar back to the Zimbabwean dollar and vice versa. Never mind facilities for banking because the banking institutions have been rendered useless at this point.
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Some African countries routinely fall into Forex shortage:
Malawi is a very good example of this. Since the year 2020, the country has had two Forex shortages, including one this year. As a result, the banks in these two instances had to stop the sending of money from the country and completely limit the amount you were allowed to withdraw and use in order to preserve its Forex.
These are just 4 examples of where the banking problems of Africa have affected the people and because of their incompetence, neglect, and failures, the economies have suffered.
Lazerpay! Decentralized and here to save the day (sort of).
I have described banking institutions have failed the African people in almost every area of the continent. Yes, to a certain degree it is not completely the banks’ fault that these various hard situations continue to come. However, it is their responsibility effectively manage them. They have shown nothing but a lack of innovation, lack of a need to improve for the people, and lack of a need to help their private and public sectors grow. This is where Lazerpay comes in to save the day. To a great extent at least.
What is Lazerpay?
Lazerpay is a decentralized cryptocurrency payment hub and platform. What does this mean? It means that Lazerpay allows users to send and receive money through cryptocurrencies. This does not just stop at the individual. Lazerpay like so many other web3-based startups on the continent is focusing on how to create booms in the small-medium enterprise sectors across the continent.
To make itself, especially appealing to businesses-both large and small scale, not only across Africa but the world, you can accept payments from customers in Lazer token (its own currency) and they will invest that amount in different assets to increase your revenue. Of course, at the moment the amount of the revenue you get back is minimal at best but as the company grows, shares grow, investments come in and more people use the Lazer token that revenue return will get larger and larger. What makes it better is Lazerpay, although funded by outside investors, is almost completely African owned and operated. All, if not almost all, of the team at Lazerpay, are African.
Origins of Lazerpay?
Lazerpay was made and is co-founded by Njoku Emmanuel. He is 19 years old. This young man is only 19 years old and has co-founded and is operating his own African startup. He has been referred to as “An African Mark Zuckerberg”. He is not Mark Zuckerberg, he is himself and he is African and does not need a western comparison. Before 19 he already worked as a blockchain developer at a British Ethereum company named Project Hydro, this being the job that made him initially drop out of university. He then resigned from that job and moved back to Africa to work for a Nigerian decentralized finance (DeFi) company called Xend Finance.
He then left Nigeria for Dubai and received contracts and other jobs from across the world before starting up his own company, Lazerpay, at 19. By starting his company he is using his Africanacity to propel the decentralized internet, blockchain technology, cryptocurrency, and all that is web3 through Africa and even the world.
(Emmanuel Njoku, 19)
To what extent can Lazerpay services replace and be better than African banking services? This is the key question that needs to be answered. For Lazerpay to be the bank substitute for the short term and for some even the long term, it needs to offer a substantial amount of services equivalent to a bank’s and perform them more efficiently than banks.
Banks on average offer:
- Deposit and storing of assets (mostly in monetary form)
- Sending of assets (mostly in monetary form)
- Monetary loans
- Currency Exchange
- Investment plans and services
- Auxiliary services such as: Insurance and mutual fund services, credit and debit cards etc
Lazerpay offers:
- Depositing of crypto assets
- Sending of crypto assets
- Converting of fiat money into Lazer token (cryptocurrency)
- Investment in Lazer token and your assets in your crypto wallet to an asset pool.
As we can see Lazerpay does not offer quite a bit of the services that traditional banks offer. With that being said Lazerpay is online crypto and web3-based substitute. It naturally cannot offer the complete set of services like in-person banks.
Lazerpay is primarily for growing small and large scale businesses and the individual, to grow them does it really need to offer all the services a traditional bank does? no, it does not. For small enterprise and big businesses’ growth, in the web3 and tech spectrum, the bare minimum they require is the exact same type of functionality that Lazerpay offers.
In regards to the original problems of “banking troubles of Africa” which were listed earlier on in this article. How does Lazerpay solve those problems if it can be a banking alternative? Even if Lazerpay is made for web3 and tech-based companies in mind. It still can. Here is how:
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“Most African countries have a bank interest rate of 7% or more”:
Lazerpay cannot give loans. However, for all transactions the users have with the bank they charge 1% transaction fees which is much lower than any typical bank. By not giving loans it actually may incentivize the use of Lazerpay because they can aid your business through your using it without them ever “hounding” the business down over owed income.
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“Some African countries which have their own currencies routinely drop their own currencies for foreign ones. Officially or unofficially”.
“Some African countries routinely fall into Forex shortage.”
“Western and some central African countries do not have their own currency but use the CAF (Central African Franc)”:
The solution to all three of these problems is the same. Instead of using a foreign currency more or using an outside introduced currency like the CAF, or a currency that routinely has Forex shortage, you can go through Lazerpay. Someone from a country facing those problems can take their currency and convert it to crypto in order to pay someone through Lazerpay. Convert whichever currency you are using into a cryptocurrency. Then pay for services taken through Lazerpay and they can save themselves from any Forex currency shortage, currency fluctuations, invasive currency usage, or any other financial mismanagement mistakes, especially from the banks and financial institutions of the country continent.
Lazerpay is still a startup. So they are still getting funding and expanding. Their services at present are still enough to help with avoiding the banking hassle of a lot of banking systems on the continent. For them, it is only up from here on what they will add, improve or even drop. However, as it stands Lazerpay is gearing up to be an African decentralized finance giant(DeFi). It will be excellent to see how young Njoku will shape the continent through Lazerpay and maybe not just with Lazerpay? we’ll see.