Local Fintech Afribit Africa uses Bitcoin to pay community workers in Kenya’s slums

In Soweto West, a neighbourhood within Kenya’s vast Kiberaslam, a new initiative uses Bitcoin to provide digital financial services to low-income residents who have long been excluded from the traditional banking system. Introduced by local fintech company Afribit Africa, the project is a powerful real-world example of how cryptocurrencies promote economic inclusion.

The operation began in early 2022 by partnering with a local garbage collection group consisting primarily of young residents. After completing the community cleanup on Sunday, these workers will be paid a few dollars worth of Bitcoin for their work.

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Garbage Collectors is a leading adoption agent at Soweto West, according to Ronnie Mdawida, co-founder of Afribit Africa. He said many Kibera residents have no access to basic savings tools due to limited documentation and bank restrictions. Mdawida described the Bitcoin-based approach as providing a practical pathway to financial access.

From garbage collection to local Bitcoin economy

Afribit Africa estimates that it invested around $10,000 worth of Bitcoin in the local economy through this model. In Kibera, where many residents live for less than $1 a day, additional income is greater.

Over time, Bitcoin usage has expanded beyond the original collector group. Some small merchants and motorcycle taxi operators in Soweto West are now accepting Bitcoin as a form of payment. ABC News reports that around 200 residents in the neighborhood are currently using Bitcoin.

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Damiano Magak, a 23-year-old garbage collector and food seller, noted that he prefers to receive payments in Bitcoin over M-PESA, Kenya’s dominant mobile money platform. He cited M-PESA’s higher transaction costs and slower processing speeds as factors that influence his decision.

M-PESA transactions under Kenyan Shilling 100 are charged, but the fees increase with the volume of transactions. In contrast, Lightning network transactions are often free when implemented through platforms implemented by Africa.

Volatility and regulations remain important issues

Despite the grassroots success of the project, major challenges remain. Bitcoin’s inherent price volatility is a major risk, especially for users in low-income settings that maintain value. Kenya’s lack of regulatory oversight of cryptocurrency also illustrates another layer of uncertainty.

While no major issues have been documented so far, the long-term sustainability of the project depends on navigating these risks as authorities are cautious about global crypto trends and potential security threats.