By Chinwendu Obienyi
The Senior Managing Director, Mercy Corps Ventures, Scott Onder, says the new Kenyan Microwork Pilot has the power to drive financial inclusion across Africa.
This was even as he noted that crypto has the potential to address unemployment, generate stable incomes, reduce the costs of cross-border payments and incentivise savings among low-income youths.
In a report, Onder said the new microwork pilot project in Kenya by Celo Foundation and Mercy Corps Ventures has helped hundreds of Kenyan youths access digital jobs with greater earnings than ever before.
According to him, the digital microwork, a global industry with an estimated size close to $1 billion, is a form of digital labor that breaks up complex technical projects into thousands of fractional tasks that can be completed on a mobile phone within minutes.
“We trained 200 Kenyan youth to access digital microwork from global platforms using a mobile app and integrated Valora digital wallet, which is built on Celo. Our pilot tested how a stablecoin could reduce the costs and challenges of sending and receiving cross-border micropayments over a three month period.”, he said.
The report noted that using cryptocurrency via the pilot dramatically reduced the average transaction cost for microwork payments – dropping from 28.8 per cent for a $5 transaction to 2.02 per cent, regardless of transaction value.
Also speaking Partner, Innovation at Celo, Will Le, explained that the goal of the company was to support an inclusive financial system that contributes to achieving prosperity across Africa.
He explained that the introduction of the innovation will reduce financial frictions and tap talent across borders, which was not previously possible with traditional financial infrastructure.
“Cryptocurrency, and specifically stablecoins, could hugely reduce the cost of remittances and foster cross-border commerce.
For instance in 2020, remittances made up 3.13 per cent of Kenya’s total GDP of over $3 billion. With global weighted average remittance costs at 4.71 per cent, Kenyans and others receiving remittances are potentially losing out on over $80 million per year,” Will said.