The Rise of eNaira: Promoting Financial Inclusion in Nigeria 🚀

Collaboration between the Central Bank of Nigeria and Gluwa will allow users of the country's digital currency to establish credit histories.

Nigerian central bank partners with Gluwa to promote eNaira using credit profiles

The Central Bank of Nigeria (CBN) has joined forces with Gluwa Nigeria, a blockchain-based financial platform, to drive the adoption of eNaira, the country’s central bank digital currency (CBDC). This partnership aims to leverage Gluwa’s Credal technology to establish credit reputations for unbanked users, thereby enhancing financial inclusion. The integration of Credal will streamline loan origination, management, settlement, and credit assessment processes for local fintech lenders. 🤝

Boosting eNaira Usage: The CBN’s Ongoing Efforts 💪

This collaboration is part of the CBN’s relentless efforts to promote the usage of eNaira. Launched in October 2021, eNaira is the world’s second-oldest CBDC. However, despite its potential, the adoption rate has been relatively low. As of mid-2023, less than 1% of Nigerians with bank accounts owned eNaira wallets, with less than 1.5% of wallet holders active in a week. The CBN recognizes the need to bolster these numbers, and the partnership with Gluwa is a strategic move in that direction. 👬

Unleashing the Power of Credit Ratings in Africa 🌍

The scarcity of credit ratings is a significant challenge in Africa, with only 20-30% of Africans having a credit score. This leaves a large portion of the population “invisible” to lenders. To address this issue, blockchain-based solutions have emerged that offer credit histories using soul-bound NFTs and capture information from low-value peer-to-peer transactions. Gluwa’s integration of Credal technology opens up new possibilities for Africans to build credit reputations, further empowering individuals who have been excluded from traditional financial systems. 👤💳

Mobile Phones as Catalysts for Financial Innovation in Africa 📱

In Africa, many payment solutions, including Gluwa, rely on mobile phones as a substitute for traditional financial infrastructure. This approach leverages the widespread mobile phone usage across the continent to provide accessible and convenient financial services. Gluwa has been actively operating in Nigeria since at least 2022, collaborating with the Lagos regional government to tokenize agricultural assets. Moreover, Gluwa’s founder and CEO, Tae Oh, also leads the Creditcoin Network, a layer-1 blockchain that establishes public ledgers of credit history and on-chain loan performance. 💼💡

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Q&A: Addressing Readers’ Burning Questions 💡

Q: How will Gluwa’s integration of Credal technology benefit eNaira users?

A: Gluwa’s integration of Credal technology will enable the creation of credit reputations for unbanked users. This will enhance financial inclusion by making these individuals visible to lenders and enabling smoother loan processes for fintech lenders.

Q: What are the challenges associated with credit ratings in Africa?

A: Africa faces a scarcity of credit ratings, with only 20-30% of Africans having a credit score. This makes it challenging for a significant portion of the population to access credit and financial services.

Q: How does Gluwa leverage mobile phones in its payment solutions?

A: Gluwa, like many other African payment solutions, utilizes mobile phones as a substitute for traditional financial infrastructure. This approach capitalizes on the widespread usage of mobile phones in Africa to provide accessible and convenient financial services.

Q: What other initiatives has Gluwa been involved with in Nigeria?

A: Gluwa has been active in Nigeria since 2022 and has collaborated with the Lagos regional government to tokenize agricultural assets. It has also advised the Nigerian government on cryptocurrency policy, highlighting its commitment to advancing financial technology in the country.

Looking Ahead: Unlocking Africa’s Financial Potential 💰

The partnership between the CBN and Gluwa paves the way for the widespread adoption of eNaira and the realization of financial inclusion in Nigeria. By incorporating blockchain technology and credit reputations, this collaboration has the potential to transform the financial landscape of Africa and extend economic opportunities to millions. Moreover, as mobile phone usage continues to rise across the continent, innovative payment solutions like Gluwa will play a crucial role in revolutionizing the way Africans access and engage with financial services. The future of finance in Africa is bright, and the eNaira-Gluwa partnership is just the beginning of an exciting journey. 🌟

References:

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