Blog Article

Building Stellar Infrastructure in Africa


Anke Liu

Publishing date



In the lead-up to the Stellar Blockchain Bootcamp by DFS Lab (applications close March 27th!), we’re featuring companies operating in Africa that build key infrastructure on Stellar to further access to financial services for users across the continent.

According to the World Bank, Sub-Saharan Africa remains the most expensive region to send money to than to any other region in the world. At the same time, it’s a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region. With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people.

Today, Jimmy Ku (Head of Growth, Developed Markets at Flutterwave), Gbubemi Agbeyegbe (Technical Director at Cowrie Integrated Systems), and Rick Groothuizen (Co-founder and Director of ClickPesa) shed light on why they’re using Stellar and what opportunities and challenges they see, giving advice to the next generation of innovative entrepreneurs in the space.

Why did you choose blockchain and specifically Stellar to power your business?

Jimmy: Flutterwave’s core mission statement is to simplify payments for endless possibilities. Blockchain represents a new technological innovation that allows us to keep pushing the limits of what is possible. We are particularly excited to explore how 24/7 access to instant money transfers could benefit those in need. We chose to build on Stellar because the network brings us closer to that grand vision of financial inclusion. And we are so excited to keep working with the excellent team at the Stellar Development Foundation (SDF) – we can’t wait to see what the two organizations can do together.

Gbubemi: We chose blockchain because we recognized the potential of this technology to create a new global financial system that is accessible to everyone worldwide. We specifically chose Stellar for the following reasons: 1) fast, scalable, and cheap transactions on the network, 2) the ability to issue assets on-chain, 3) the built-in decentralized exchange (DEX), and 4) its robust programming APIs.

Rick: As a company active in the fintech space, we recognize the potential of blockchain technology for international payments. We chose to build ClickPesa on Stellar due to its speed, efficiency, and low transaction fees. The built-in DEX and compliance layer makes the network especially useful for international payments. Plus, the ecosystem is thriving, with many participants sharing the same vision we do.

Flutterwave recently collaborated with Tempo to create two new corridors from Europe to Africa. What impact does this have on your business operations?

"Africa is an important market for global remittances with two of the top 10 remittance recipients globally accounting for over $46 billion annually. If we combine Sub-Saharan Africa with the Middle East & North Africa regions, it is over $95 billion in annual remittances. So, this is a massive opportunity for companies like Tempo and Flutterwave to tackle together.

More importantly is the value of those remittances – they are particularly high because remittances are a large part of the GDP for many countries. In Senegal, for example, over 10% of the GDP comes from remittances. They are one of the top 10 remittance recipients in the Sub Saharan Africa region with $2.5 billion annually (65% of those coming directly from the EU)."
– Jimmy Ku, Head of Growth, Developed Markets of Flutterwave

What are the major entrepreneurial opportunities you've noticed sprouting up in the region you operate in?

Jimmy: Fintech has been an area of focus for both founders and investors across Africa, and the recent funding rounds for Flutterwave, Chipper, OPay, etc. highlights this strong interest. But, as the underlying payments infrastructure is being put into place, we are also seeing founders address massive opportunities within other critical areas of the well-being of African citizens. I am particularly excited about the innovation that I am seeing within proptech, ecommerce, and healthcare.

Gbubemi: Financial services for the African region have been underserved by traditional global service providers. With growing populations and economies, the demand for global payment services from African consumers creates a massive opportunity for entrepreneurs to leverage financial technology that provides access to global payments.

Rick: Although there are major well-known opportunities in the payment space in Africa, there are plenty of other opportunities that are worth looking into, such as lending and value (goods, services, art) exchange types of businesses.

How does Stellar align with and support your growth plans to expand your payment corridors?

"Payouts from other countries to Nigeria can only be done in USD based on CBN policy, which opened up the opportunity for us to leverage USD Coin (USDC), a dollar digital currency. In this case, the customer sends us USDC, and upon receipt of the USDC into our Stellar wallet address, our core service confirms this transaction and pushes a payout request which triggers a transfer to the beneficiary's account.

We currently support USD payout to banks we have direct integration with in Nigeria. It’s the entire Stellar ecosystem that supports our growth, whether they are anchors, wallets, or traders. Stellar is quick, efficient, and affordable in a decentralized way, and it’s only getting better."
– Gbubemi Agbeyegbe, Technical Director at Cowrie Integrated Systems

What have been the main challenges for your business so far and how do you plan to overcome it?

Jimmy: As Head of Growth for Developed Markets, I focus heavily on sustainable and disciplined growth. Despite growing from 290K to over 900K merchants over the past year, we've maintained that same focus. One of the challenges of entering a market that already has several established players is developing brand recognition. One way would be to spend money on marketing and brand building, but the Flutterwave approach has been to focus on delivering value in everything that we do.

We know that we have built a payments infrastructure that lets businesses expand and grow across Africa, and that is why we already power enterprises like Uber. By focusing on this value proposition and having our product speak for itself, we can be more thoughtful about the marketing initiatives and strategic partnerships that we pursue and seek out those that also deliver on the most value.

Gbubemi: The main challenge is regulation (or the lack of it). Regulatory authorities tend to default to stricter policies when it comes to keeping pace with innovations in financial services.

To overcome this requires proactive and persistent engagement with multiple regulatory authorities. We approach regulators via industry associations that can organize concerted engagement and policy discussions.

Rick: Our main challenge has been around educating users about Stellar. We have overcome this by reducing the exposure in the user experience. However it is important that users can optimally make use of its technology. We are trying to do this by finding the right balance between educating and making it understandable. Secondly, due to the young nature of the technology, there is little talent available that has sufficient expertise, which we address through ongoing internal and external education.

How has the ability to issue and anchor representations of the Kenyan and Tanzanian Shilling impacted your business operations?

"Our services are giving great exposure and increasing interaction with other anchors and players on the Stellar network. An example is GetPaid, a marketplace platform for freelancers, creators, and traders in Africa, that gives access to global opportunities through gigs, knowledge, crypto, and NFTs. GetPaid uses Stellar-powered wallets as user accounts which connect to ClickPesa’s tokens issued on the Stellar network."
– Rick Groothuizen, Co-founder and Director of ClickPesa

To the entrepreneurs reading this blog post, what advice would you give them as they begin their journey on Stellar and in the fintech space in Africa?

Jimmy: I'm excited to see you build the next African unicorn. The only advice that I can give as a former founder is that this will be a roller coaster ride. It will have ups and it will definitely have downs. Try to keep yourself from going too far into either extremes. It will be difficult at times. It will definitely be memorable. And, if you are doing something you are truly passionate about, it will undoubtedly be rewarding. Work hard and enjoy the ride.

Rick: For entrepreneurs that have existing businesses and want to begin with Stellar, it is important one has a good overall understanding of the technology and how it can fit within your business. Once that is achieved, start implementing small parts of Stellar in your business.

For starting entrepreneurs, the above applies; however, make sure you have a use case first (and users where possible). Integrating with Stellar is not a goal on itself; rather, it should facilitate and empower your product.

For both: once you begin the journey, it’s worth checking out the programs and initiatives SDF has to offer, such as the Stellar Community Fund (SCF).

Gbubemi: We would advise entrepreneurs to focus on viable use cases that have real-world demand instead of technological novelty. It is important to validate your business model with real users to achieve success.