The hot buzzword in Africa over the last decade has been Microfinance. This all important Microfinance buzzword appeared to be the all awaited solution that will tackle Africa’s challenges with poverty and unemployment.

The spectacle was reminiscent of the “Africa Rising” narrative that made global headlines a few years ago.

Microfinance aimed to solve one key challenge, which was to dramatically improve the lives of poor Africans. Being conscious of the fact that access to finance was a major challenge for many budding entrepreneurs and smallholder farmers.

The amplified conversation around microfinance was also necessitated by the fact that for many years, a huge chunk of the global share of people affected by extreme poverty were on the continent.

More than half of the extreme poor live in Sub-Saharan Africa. In fact, the number of poor people in the region increased by 9 million, with 413 million people living on less than US$1.90 a day in 2015. If not checked by 2030, nearly 9 out of 10 extreme poor will be in Sub-Saharan Africa according to the World Bank.

International NGO’s with a mission of tackling poverty on the continent heavily invested in microfinance. Most notable amongst these Foundations were KIVA, One Acre Fund, Gates Foundation, Grameen Foundation and a host of many other local charities.

There was a general consensus that microfinance will be highly impactful in resolving financial challenges that most Africans had to deal with. In Ghana, the situation was no different.

The Microfinance industry flourished which led to a steady influx of investors and many business people seeking to own Micro Finance Companies.

Some Microfinance founders were in it for excess profit and to take advantage of a burgeoning industry. Investors understood the power of mobilizations and crowdfunding. With time the largely unregulated growth of the microfinance industry led to sketchy dealings, aggressive advertisements of ridiculous interest rates on deposits, weak information systems etc.

Before long, Microfinance institutions and their founders could not be found. Some closed shops and bolted with depositors’ hard earned money. The case got so severe that the Bank of Ghana had to restructure the entire Microfinance Industry. As at May 2019, 386 Microfinance and Microcredit institutions had become financially insolvent and 192 of them had their license revoked.

In Ghana, the Microfinance industry is currently picking itself up from the crisis and the struggle within the industry is a cautionary tale on the importance of open systems, information symmetry and good governance.

Blockchain technology stands to resolve many of the challenges that plagued the Microfinance industry.

The first advantage of the blockchain in resolving such a challenge is the open systems and peer monitoring. Since blockchains are public ledgers, transactions can be monitored in real time. This leads to proper peer scrutiny and that financial systems are monitored by everyone. Blockchain stands to erase challenge of information asymmetry that plagues the current microfinance industry.

If all people were empowered to monitor and regulate financial transactions, people will be more considerate in their action that affects the industry.

On the back of peer monitored transaction is the second level of peer financing. Cryptocurrencies hinged on blockchain facilitates borderless transactions and makes financing easier. It also opens up an entire global market to users. In that regard, people with services to offer do not have to go through the hurdle of looking for ways they can serve clients who are not residents in their country. This provides them true freedom to focus on their craft earn income.

True microfinance will be in the hands of people who have the power and can share their wealth and by so doing helping others.

The blockchain provides the first dip of the possibility of a truly global and worldwide finance that Africa can partake in. The responsibility is on us as Africans to continue developing the use cases to lift Africans out of poverty.

This article originally appeared on Block News Africa