In Soweto West, a neighborhood within Kenya’s Kibera slum, about 200 residents use bitcoin as a form of payment, marking an unusual but growing acceptance of cryptocurrency in one of Africa’s largest urban slums. This initiative, led by Kenyan fintech company AfriBit Africa, aims to improve financial inclusion in one of the country’s poorest and most underbanked areas.
AfriBit Africa co-founder Ronnie Mdawida highlights bitcoin’s potential to grant financial access without requiring traditional documentation needed for bank accounts. “They do not need documentation to have a bank account … that gives them the foundation for financial freedom,” he said.
Bitcoin, the first and most prominent cryptocurrency, was introduced to Soweto West in early 2022 through crypto-denominated grants to local garbage collectors. These workers often receive funding from nonprofits, and many are young individuals more willing to experiment with new technologies. After weekly trash collection, garbage collectors receive payments in bitcoin, helping to spread its use in the community. AfriBit Africa estimates investing around $10,000 in the area.
Some merchants and motorcycle taxi drivers now accept bitcoin payments. Local vendor Dotea Anyim said about 10% of her customers pay with bitcoin due to its speed and low transaction costs. Residents like garbage collectors Damiano Magak and Onesmus Many prefer bitcoin over Kenya’s popular mobile money platform M-PESA, citing lower fees and enhanced security against theft.
However, bitcoin’s price volatility raises concerns. Magak and Many estimate that 70% to 80% of their net worth is held in bitcoin, a risky level of exposure according to fintech expert Ali Hussein Kassim. He warned that vulnerable communities may lack the financial resilience to absorb significant losses, given bitcoin’s unpredictable value and lack of regulation.
Mdawida acknowledges the risks but emphasizes AfriBit Africa’s investment in community education, including financial literacy and cryptocurrency courses, to mitigate potential downsides.
While other developing countries like El Salvador and the Central African Republic have experimented with adopting bitcoin as legal tender, both have reversed their decisions amid challenges. In Kenya, the cryptocurrency sector faces strict regulations and crackdowns, though this localized project in Soweto West remains permitted.
Despite fluctuations, users remain optimistic. “On my phone I put notifications on when bitcoin rises … and it’s all smiles,” said Magak. “Whenever it fluctuates up and down, I know at the end of the day it will just rise.”
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