We started Kora thinking there was a huge opportunity to build a more inclusive financial system via the blockchain.
Financial services have been proven to help grow wealth. Unfortunately, for much of the world access is uneven and expensive. In many places formal banking is seen as something exclusively for the wealthy. Banks require high minimums and fees for opening and maintaining accounts. Due to the cost to serve and inability to prove identity, many financial institutions don’t open branches in remote or low-income areas, requiring people to travel for hours to transfer money. People that own and utilize property but don’t have a trusted record to prove it are unable to use it as collateral for loans, turning it into “dead capital”. This exclusion of billions of people from growing and accumulating their capital has disproportionately increased the gap between the rich and the poor, leading to constant agitation in various regions, social instability and indirectly causing political instability. This is both a humanitarian crisis and an economic crisis as a third of the world's potential for value creation is ostracized.
As we learned more about the problem, we decided that optimizing one part of the problem was not enough. Instead, we have to address the problem at its root by giving control over capital back to each user and community. Blockchain enables us to do this.
We identified five basic building blocks that can be used to build any financial system:
- Identity: Letting a user prove they are who they are, and that they did what they say they did.
- Secure storage of value: Protecting your wealth from both devaluation and theft.
- Money transfer: Transmitting value cheaply, quickly and over distance.
- Marketplaces: Creating venues for users to exchange money for goods and services.
- Governance: Securely delegating the use of your capital to other users, while retaining transparency into its use and the right to revoke entitlements.
The Kora Network is a public blockchain that deconstructs and abstracts the infrastructure needed for financial services so that new providers can easily provide financial services as needed for users, without the huge cost of establishing and running a front-to-back financial institution. It makes launching a financial services business as cheap and easy as launching a new instance on AWS, with the prime benefit of driving down costs and increasing the variety of offerings for customers.
The Kora Network provides the tools needed to build a self-sustaining, community-owned ecosystem for circulating and accumulating capital within a community. This includes the ability to validate identity, and to use that identity to store, transfer, or lend money, to make payments, and to provide or access value-added services like lending, marketplaces, benefit distribution and digital education, even without internet access or a smartphone through channels like SMS or USSD. “Self-sustaining” is defined as the wealth in both the community as a whole and the majority of the community increasing, while “community-owned” is defined as the community itself providing most of the key roles when circulating capital. Value is transferred electronically via the blockchain, and if needed, is converted from electronic to fiat through local agents. This builds a transaction or service history and proof of informal funds through friends and family that can be used to obtain loans.
More details are contained in our white paper: https://docs.google.com/document/d/1lctZEFdj3tnjmEBH_jgu4UfaGN6m8SXNpmOZluTG8DI/edit#
What's next for Kora
As we go forward, building out the technology will be only one piece of the puzzle. The key will be to execute and onboard users onto the Network, in a way that empowers existing communities instead of displacing them.
We are planning to launch a pilot in West Africa centered around helping farmers create trade unions within their communities that look out for their own interests. In order to better understand the market we are serving, we are planning a beta in November with an MVP prototype, to get the product into users hands and to build the production system accordingly.
We will not be able to achieve success alone, and ask of you, and anyone else who has an interest in building a more inclusive financial system to join us in this journey.