Blockchain for Banking News

UN lauds Ant Financial’s blockchain, M-Pesa for combating Covid-19 effects on economy

UN United Nations

Last week, the United Nations, in a monthly newsletter, listed Ant Financials’ blockchain as instrumental in helping fight the coronavirus pandemic. It also mentioned the digital money transfer M-Pesa, which is widely used in Africa.

The newsletter was published by the Task Force on Digital Financing of the Sustainable Development Goals.

The UN recognized the contribution of Ant Duo-Chain, a supply chain finance platform launched by Ant Financial early last year. Generally, after any supplier delivers goods, it has to wait for weeks before the invoice gets approved and payment is made. 

Ant Duo-Chain allows SMEs to get instant credit by selling invoices to banks, which collect the money from the corporate customer. This gives higher liquidity to suppliers. 

SMEs struggle to get financing from banks because the banks have limited visibility into their finances and hence SMEs are high risk. By using Ant Duo-Chain, the bank, supplier and the corporate customer can share details of transactions, increasing trust between the parties. Hence the bank knows the invoice is real, whether it has been approved, and the ability for the customer to pay. This reduces the bank’s risk so it can disburse money to the supplier. 

“Ant Duo-Chain, a blockchain-powered supply chain finance platform developed by Ant Financial, allows small and medium suppliers to apply loans from banks with their receivables from large enterprises, helping them deal with financial constraints during the coronavirus epidemic,” said the UN in its statement. 

Meanwhile, Ant Financial has also launched a blockchain-based online bid opening system to allow SMEs to engage in contactless bidding for procurement. 

A few weeks ago, Ant Financials’ mutual aid blockchain platform Xiang Hu Bao added coronavirus to its list of critical illnesses. The platform will make a maximum one-time payment of 100,000 RMB ($14,089) to members who contract Covid-19 and pass away. However, other members will not fund this payout, and Ant Financial will foot the bill itself. 

Turning to M-Pesa, the UN said that Kenyan mobile operator Safaricom increased the transaction limit on the app to Ksh150,000 ($1,500). It also waived off money transfer fees for transactions below Ksh1,000 ($10) for the next three months. The UN believes the reduction in transaction costs could benefit low-income users in this time of crisis. M-Pesa is not blockchain-based and Safaricom is owned by Vodafone.

A few days ago, the U.S. Homeland Security listed blockchain for food procurement under its list of essential services.

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