Survival blueprint for 3 Kenyan fintechs

Kenyan fintechs that have included or depend on cryptocurrency may face severe consequences in the event of a major Bitcoin meltdown in 2025. Reduced transaction volumes, a drop in user confidence in digital assets, and direct monetary losses on Bitcoin holdings are just a few possible effects.

This is a survival guide for three hypothetical situations. Fintech companies in Kenya with differing degrees of Bitcoin exposure:

1. Kotani Pay, BitConnect Kenya: Heavily invested in Bitcoin-related services (e.g., Bitcoin wallets, exchanges)

Immediate Actions:

• Halt Bitcoin-related promotions and onboarding.
• Communicate transparently with users about the crash.
• Conduct a thorough audit of company and user Bitcoin holdings.
• Temporarily implement strict withdrawal limits to prevent bank run scenarios.

Medium-Term Strategies:

• Diversify service offerings: Focus on non-Bitcoin related fintech services like mobile money transfers, bill payments or lending products.
• Explore stablecoin integration: Integrate stablecoins pegged to stable fiat currencies like Kenyan Shilling or US Dollar.
• Offer financial literacy programs: Promote responsible investment practices and educate users about cryptocurrency risks.
• Seek alternative funding: Explore traditional venture capital or partnerships with established financial institutions.

Long-term strategies:

• Leverage blockchain technology for secure data storage and digital identity solutions.
• Advocate for clear, balanced regulations with Kenyan regulators for a stable, trustworthy environment.

2. IntaSend, Bitpesa: Integrates Bitcoin as a payment option alongside traditional methods like M-pesa

Immediate Actions:

• Temporarily suspend Bitcoin payment processing until market stabilizes.
• Communicate with merchants and users about Bitcoin payment suspension.
• Re-evaluate and strengthen risk management protocols related to cryptocurrency exposure.

Medium-Term Strategies:

• Re-evaluate Bitcoin payment viability post-market stabilization.
• Prioritize core payment services like mobile money and card payments.
• Explore stablecoin payments partnerships for less volatile digital asset payment options.

Long-Term Vision:

• Adopt flexible payment gateway for new digital payment methods.
• Monitor global cryptocurrency trends for informed digital asset integration decisions.

3. Tala, PesaPal: Minimal or no direct exposure to Bitcoin, primarily focused on mobile lending and financial inclusion

Immediate Actions:

• Monitor indirect impacts: Economic downturn affects loan repayment ability.
• Reinforce core business: Strengthen lending and financial inclusion services. Ensure robust credit assessment and collection processes.

Medium-Term Strategies:

• Capitalize on market uncertainty: Position fintech as a stable alternative during cryptocurrency market turmoil.
• Explore partnerships with distressed crypto firms cautiously: Potential user acquisition or technology integration at favorable terms, with thorough due diligence

Long-Term Vision:

• Continue focus on financial inclusion, leveraging technology for accessible financial services.
• Diversify funding sources to mitigate risks associated with single asset class or investor type.

General survival strategies if a bitcoin crash (infographic)