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Posted by admin, September 23, 2018

L-Pesa LPK Network Effect

L-Pesa is a progressive finance service that has been transforming communities over the past few years. Due to the good works that this service is responsible for, there are those that believe it is a charity. However, L-Pesa is purely a business. The benefit of being a business is that it is able to enjoy and offer certain freedoms that charities don’t have. As a finance service business, L-Pesa has to provide a return.

L-Pesa facilitate microfinance and has done so from its inception. That is why today, L-Pesa offers services that are extremely efficient. For example, the cost of doing a $1000 loan is the same as a $100 loan. Banks and financial institutions are limited in how low they are able to go when offering finance service, due to their operational costs.

The New Options Available

L-Pesa remains relevant because it keeps evolving, and now it is making use of digital tokens. Blockchain brings transparency and efficiency. This offers a benefit as it drastically reduces the operational costs, making small lending viable. Tokens are efficient transaction ally over fiat. This makes them much more appealing to the target market for L-Pesa, and this market are working towards building a community and creating a network effect. By making use of fiat, it is possible to use blockchain to expand reach, as well as lower the costs of the transactions.

Elevating Reach

When considering financing costs, you will find that bank financing costs restrict those people who are at the bottom from getting the funds that they need the most. This is overcome by making use of L-Pesa. Expanding operations by virtue of expanding reach would allow L-Pesa to now make facilities available to people who cannot be served by banks or microlenders. L-Pesa sees opportunity in this market, rather than having them deemed to be “not profitable”.

This is because L-Pesa is solving an issue. This issue is the millions of people who don’t own enough or have the right paperwork, or live under oppressive regimes. These people cannot access microfinancing since dealing in fiat has bureaucratic requirements. L-Pesa makes sure that these people are not being left behind. Blockchain and token help to overcome many barriers and deepen the reach of L-Pesa to create a more inclusive society.

It is worth noting that L-Pesa is a business and not a charity. The beauty of L-Pesa’s work is that it remains fully grounded in business, while the result is ultimately very charitable. Everyone wins.