About L-Pesa Token (Kripton)
L-Pesa Token (Kripton) as a fintech startup wants to enhance the microfinance services in developing world by taking advantage of the fast-growing need for financial services. To gain ground and validate their business model, they have started building sophisticated technology to automate their operations. The greatest barrier posed to their growth is the ability to fund loans and acquisition by its users. While the loss ratio on loans is below 10 percent, the return rate is approximately 25 percent.
“Our vision is to improve people’s lives through efficient access to credit and related financial services”
At a time when four important market forces emerged that allows for scaling, the idea and the business model for L-Pesa were incubated. This decade market forces that influenced the L-Pesa model are mobile technology, artificial intelligence & big data & blockchain, alternative credit data, and biometric identity. These market forces were harnessed to build a technology that uses proprietary credit scoring model that enhances micro-lending scaling in developing countries with a loss ratio less than 10 percent. Fully automated, it allows a small back office to generate a high volume of the loan. The terms and servicing of these loans are supervised by L-Pesa.
As a founder and managing director, Ron Ezra Tuval has vast experience in the developing worlds that are technology-infused and primarily related to agriculture and tourism. His first encounter with microfinance was in South East Asia, where he incubated the idea of L-Pesa, while he later integrated technology for full maturity. The team boasts of strong and diverse individuals that serve as in-country managers that operate in Kenya, Tanzania, Uganda, and India. The back office team in these countries is in charge of background checks, customer service, credit approval or denial. There are also virtual teams across Europe, USA, and India that handles technology, marketing, and accounting.
Although microfinance has been around for a long time, the reach of traditional microfinance is limited. L-Pesa wants to bridge this gap by providing a microfinance solution that is tailored for poor farmers and business owners. There is lack of unmet demand for credit by middle-class business owners in developing countries; the current financial infrastructure does not support credit underwriting. These possess problems:
- Credit Underwriting
The lack of a proper report from traditional consumers and business credit often leads to high loss ratio that is given out in developing countries, unlike developed countries that have proper credit underwriting.
- Lack or no of bank credit
A large majority of the populace finds it difficult to assess loans from traditional banks in developing countries.
- Microfinance tailored to only agriculture
There is a bias from traditional microfinance institutions towards middle-class consumers and business owners. They primary lend loans to the very poor rural farmers.
- Archaic operating model
Failure of banks to take advantage of new technology by banks and microfinance institutions often leads to high overhead cost, and inability to track credit underwriting.
- Unbanked Consumers
Lack of bank accounts from small business owners, farmers and consumers is a big challenge.
The L-Pesa solution
- Big data, artificial intelligence, and blockchain
Through the use of big data, storage of vast amounts of data and their analysis is now very cheap and simple than what obtains years ago. Automated credit underwriting through the use artificial intelligence has opened new opportunities. Blockchain technologies have disrupted and revolutionized financial services. Transfer of values is now faster, safer and less expensive through the use of blockchain.
- Alternative credit data
It was difficult to assess credit data decades ago, but with the advent of social media and technological trends, a new tool that assists in loan underwriting is now possible. L-Pesa has developed a proprietary model based on user behavior to keep track of credit data. This has now become industry standard.
- Mobile technology
The rise and the influence of mobile technology in the last decade cannot be overemphasized. Most of the humankind now own mobile phones, some of them smartphones. Through the use of mobile phones, a financial service such as M-Pesa is now possible and available in many countries. This supports both the banked and unbanked populace and based on their penetration, mobile money services such as Tigo Pesa and paytm has enhanced L-Pesa.
- Biometric identity
Inability to carry out successful identity verification online and in person over the years has led to traditional microfinance creating branches. There are some big business and corporation leading the front in biometric ID system. Successful implementation of this will lead to reduced cost and facilitate the provision of financial services without building physical branches.
Services and features offered by L-Pesa
L-Pesa wants to improve people live by providing an efficient means of accessing credit and financial services. It has already issued over 38,000 loans after its first launch in Tanzania in 2016 and aims to provide more additional financial services to its users.
The platform offers 95 percent automation for both user acquisition and loan underwriting process that is scalable. Their developers have spent more than two years in developing a customer facing and back office system. The system has a web-based and mobile interface that is accomplished via social media and SMS.
- Proprietary credit underwriting system
As a key to the L-Pesa success, the credit underwriting system model is based on users trust. A user is able to access larger loans after fulfilling his smaller loans. After a successful repayment, users are awarded credit score. Other factors such as identity verification enhance a user’s credit score.
- Credit score system
This provides an efficient means of loan application and processing through the admin back office
ICO details and token distribution
The L-Pesa token (Kripton) also known as the LPK is based on the standard ERC20 ethereum platform that allows users to use the L-Pesa application. Presale starts on March 18th, while the public sale starts on April 10th and ends on May 10th. The hard-cap stands at 52 million dollar for a 2.6 billion token supply. 58 percent of the token will be for sale, 15 percent for management and team, 10 percent for advisors, 1 percent for bounties, and the remaining 16 percent for business development. Currently accepting only ethereum, 1 ETH is equivalent to 17,500 LPK.