Decentralized Finance (DeFi) is bolstering efforts of Web3 startups in Africa to develop at a faster pace this year. The continent grapples with the challenge of a large number of unbanked and underbanked population, but deploying DeFi solutions can be seen as a huge leap towards achieving financial inclusion.

DeFi — financial services and transactions mainly of the peer-to-peer that run on blockchain — offers Africans an easy way to save, send, invest and borrow money compared to building robust conventional financial systems like those in developed economies.

“DeFi is a blockchain-based ecosystem that operates without the need for central authorities, allowing users to access financial services directly through smart contracts. DeFi has democratized finance, providing increased accessibility, transparency, and efficiency,” a report compiled by EMURGO Africa said.

In short, the benefits of DeFi can be low cost of transactions, elimination of middle entities, and easy entry for individuals to access financial services.

DeFi projects led by African startups have been busy over the past six months. Here’s an analysis of how some of the leading projects have made progresses:

For Real Estate:

Patamali, a Kenyan startup, aims to revolutionize real estate financing through DeFi by creating a platform allowing investors to invest in real estate projects using cryptocurrencies. The platform will allow investors to buy tokens that represent ownership of a portion of the property. The tokens can be traded on crypto exchanges, making it easier for investors to buy and sell their investments. Patamali is in the process of developing the platform and is expected to launch soon.
Empowa, a DeFi platform, reported that in the half of 2023, it will break ground on a 25,000-housing development in Beira Mozambique and launch a development with a new partner in its second African country. Empowa offers decentralized finance (DeFi) solutions that facilitates a lease-to-own model for individuals aspiring to become homeowners. The platform collaborates with property developers to ensure the availability of housing units for prospective buyers.
The Nigeria-based prop-tech startup, HouseAfrica announced its real estate related product, Systemap, which enables investors to select, verify, and pay for estate plots online. Its blockchain capabilities support a secure land registry, and alongside a map of the locality, digitizes sitemaps for real estate projects.

For Small Businesses:

Paylend Africa, a Nairobi-based payments platform, is seeking to help small-scale retailers access credit. It has announced plans to incorporate blockchain technology.
The firm plans to use crypto and blockchain to cut the cost of transactions. The platform has attracted approximately 5,000 MSMEs, catering to a customer base of over 20,000.

For Saving and Investment:

Lagos-based DeFi platform, Xend Finance, launched MadWallet, Africa’s first DeFi digital wallet extension in March 2023. The extension, compatible with popular web browsers such as Brave, Chrome, Microsoft Edge, Mozilla Firefox, and Opera, aims to provide faster and more secure access to DeFi wallets. The startup is working with cooperative societies in Nigeria, giving them access to DeFi products such as alternative investments with stablecoins

Hisa Technologies has leveraged blockchain to enable affordable investments in stocks and securities not only in Kenya but also in global money markets, including the US. Hisa’s platform utilizes fractionalization, allowing Kenyan investors to purchase fractions of stocks and US securities from their preferred investment companies for as little as $5. The aim is to democratize stock and securities investing, making it accessible to individuals and empowering them to create wealth.

A few months after its $8m seed round, Ejara, a Cameroon-based crypto-based savings and investment platform, received undisclosed funding from Adaverse, a Cardano Accelerator in Africa. Ejara offers a range of investment opportunities, including fractional shares, commodities, and cryptocurrency, while enabling secure and fast payment remittance across borders.

Bitokun Labs, a blockchain-based platform, has transitioned from being solely a lottery platform to a DeFi platform, aiming to promote cryptocurrency adoption in Africa. The company is set to introduce its decentralized finance (DeFi) services, providing individuals with opportunities to save, invest, and potentially earn rewards. The concept entails users depositing their cryptocurrencies into staking pools, allowing them to engage in a transparent decentralized lottery system.

For Insurance:

Aeropaye, a Web3 travel insurance company, announced that it is in talks with Qatar Airways, and Lufthansa to offer its token-based insurance product for travelers. The platform uses smart contracts when travelers book tickets through its system. Users can then claim their refunds if their flight gets canceled or delayed. They can opt to book another ticket at a discount or get compensation.

Lemonade Crypto Climate Coalition paid out insurance claims to over 7,000 Kenyan farmers who were affected by droughts and floods. The coalition is a partnership between Lemonade Insurance Company and blockchain-based climate data platform, The Demex Group. The farmers were able to receive their payouts within 24 hours of filing their claims. The partnership aims to provide affordable insurance to farmers in developing countries who are vulnerable to climate change.

-Edited by Shigeru Sato, Faustine Ngila
-Top image photo by Unsplash