An international inspiration in Fintech

Sofie Blakstad was writing a book on ‘how to build a bank’ after years of working in finance. She had been advising a bank on how to rebuild after the 2008 crash, but as she was working on the book she realised that “the last thing the world needed was another bank”.

Sofie had started her career in publishing and marketing, but moved into banking by teaching herself programming and business design. She has spent most of her career since then in finance as a technologist and then in business transformation. “I built my career on impatience,” she says.

While researching for the book she was working on infrastructure issues with many countries in Africa and realised the extent of the logistical problems that made it difficult for banks to deal with them. “It was an eye opener,” she says. She was also aware of how the financial crisis was deepening global inequality. She wanted to do something about it. She knew that small businesses are the backbone of many economies, but that SMEs, particularly microbusinesses, often find it difficult and expensive to access bank products and that banks find it hard to evaluate SMEs.

Sofie was working with Rob Allen, a specialist in blockchain technology. The two began bouncing ideas around and realised that the main problem was one of trust rather than products.

Sofie then met Matt Mims whose background is also in banking. The two looked at ways to build trust and enable technology in places where there is no infrastructure. Hiveonline was born. Sofie says: “We felt we could build better economies by digitising trust and working with social groups such as savings groups.” Savings group, or Village Loan and Savings Associations (VSLA) as they are also often called, are informal groups typically consisting of 15 to 30 members who meet on a regular basis – usually weekly – to save and borrow money.

Building trust

Hiveonline gives small borrowers a way to prove themselves trustworthy. Its blockchain-based app, which also works in offline mode – vital for remote communities where wifi may not be available, runs on any smartphone and measures micro transactions. Every small payment or meeting attended is documented to show how reliable the borrower is. Lenders are also scored on their reliability and the way they treat customers.

Most of the early work for Hiveonline was done by Sofie in 2016, but by 2017 the organisation had won a large investment and was able to bring more people on board. They started in the Danish construction industry, but soon realised that their product was needed more in Africa, given the domination of microbusinesses in desperate need of finance. They have since worked in Niger, Mozambique and Zambia. They have also ventured into Honduras and are looking at going into Kenya and Nigeria.

Sofie says early challenges included working with customers with no access to phones, poor signals and low digital literacy. Hiveonline also learnt that there is no point in giving microbusinesses access to finance if they can’t sell the things they produce. So they worked on how the app could help businesses market to a wider audience outside their local area and are working with big business and others to build value chains.

Sofie says Hiveonline is focused on building sustainable businesses, on giving back to communities and treating people fairly. “It’s reverse extractive capitalism,” she states.

She hopes that if there is one good thing that can come of all the misery of Covid it is innovation and change in the way economies work.

Award winner

Sofie’s success has not gone unnoticed. Earlier this month, she was awarded the FDM Every Woman in Technology Award in the category of International Inspiration. She was delighted to win and to be in the company of other women leaders in the tech sector, being very aware of the importance of strong female role models. “The more there are of us the more we can show what we can do,” she says, adding that having more women in tech is also good for business given so many customers are female. Not only that, but Hiveonline is using technology to reach a ‘virtually untapped market’ of female entrepreneurs. “That is an impact and profit opportunity,” says Sofie, adding that “awards like Women in Technology help women understand that they do belong in the room”.

She is keen to emphasise the fact that she didn’t go to university or study technology. She is self taught and believes that if you are passionate enough about something you can learn it.

Sofie adds that it was a risk to leave banking and start afresh, but in fact her reputation has grown and she has since worked as an adviser to the UN. “When I started Hiveonline I thought the social capital I had earnt in my career would vanish, but it is the other way around. Organisations have hired me for my expertise. They see me as valuable.”

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