L-Pesa overview of market problems and L-Pesa solution
L-Pesa market problems.
Microfinance has a long history around the world and for centuries has filled an important. Various forms of microfinance had a major impact on economic development in Western Europe in the 18th and 19th centuries. According to the research, microfinance has started making an impact in Asia and Africa through organisations like Grameen Bank.
Nevertheless, traditional microfinance has limited reach and solutions have been targeted towards poor farmers and small business owners. Middle class consumers and business owners in developing countries have an unmet demand for credit, but the current financial infrastuture in these countries does not support credit underwriting. So the market today displays a number of problems which are:
Underwriting
Lack of bank credit
Microfinance targets agriculture only
Outdated operating models
Microfinance targets the poor only
Most consumers are unbanked
The L-Pesa solution.
The idea for L-Pesa was incubated for a decade, and the business was launched at the time four important market forces coverged to allow for rapid scaling which includes the following:
