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In a live stream on Christmas Eve, founder of Cardano Charles Hoskinson mentioned a new partnership he is very excited about that will start in the second half of 2022. Here's what it is.
From Min 7.42 of this broadcast @IOHK_Charles mentions, the partnership focus he is most excited about this year is the one with @Pezesha_Africa . I am equally excited about this partnership as we join hands with Cardano to build an end2end financial operating system for Africa https://t.co/FrVXb9rsOO
— Hilda Moraa (@hildamoraa) January 5, 2022
New Cardano partnership for end-to-end payments
The partnership Hoskinson mentions starting from minute 7:42 on the video is about Cardano teaming up with Pezesha to build a peer-to-peer financial operating system in Africa.
Hoskinson described how he sees this in a few words: a customer in Kenya or any other country in Africa, who has a blockchain-based identity and a credit score, can receive a loan in crypto via stablecoins in just one click and pay it back later in the same manner.
Transactions here would be settled on Cardano. At the moment, Hoskinson reminded, in the microfinance space, the interest rate is 35-80% per annum with a 40% default rate. As for Pezesha, he started, its interest rate is 3-4% per month (36% per annum) with a default rate of just 2%.
Circumventing banking system in Africa
Hosk stated that once this Cardano-based financial operating system turns on with Pezesha, it is going to be bigger than the traditional microfinance space in Africa.
He believes that this would lead to interest rates dropping gradually due to competition because of the oversupply of capital relative to clients. The second thing is that he believes with this partnership Cardano will completely circumvent the banking system in Africa. It is "at times tremendously predatory" and allows "some of the worst people to stay in power."
The Cardano founder then wants to find ways to spread this blockchain-based system all over Africa.