Kibera Turns to Bitcoin for Security and Financial Independence

Along the bustling roads of Soweto West, a neighbourhood within Kenya’s sprawling Kibera slum—often cited as Africa’s largest urban informal settlement—vegetable stands operate much like anywhere else.

Yet, what sets this community apart is their growing acceptance of bitcoin as a form of payment.

Approximately 200 residents in Soweto West now use bitcoin, part of an ambitious effort to bring financial services to one of Kenya’s poorest and most underbanked areas.

Advocates highlight bitcoin’s potential as an accessible, democratic technology, though experts caution about its inherent risks.

AfriBit Africa co-founder Ronnie Mdawida, a former community worker, expressed:

"In many cases, people in Kibera do not have an opportunity to secure their lives with normal savings. [With Bitcoin,] they do not need documentation to have a bank account … that gives them the foundation for financial freedom.”

This crypto adoption was introduced in early 2022 by AfriBit Africa, a Kenyan fintech firm, through its nonprofit initiative aimed at enhancing financial inclusion.

AfriBit Africa began by distributing crypto-denominated grants to local garbage collectors—often supported by nonprofits—who are predominantly young and more receptive to new technologies.

After their Sunday trash collection, these workers receive payments worth a few dollars in bitcoin.

So far, the initiative has infused around $10,000 into the community, with these collectors serving as primary ambassadors for bitcoin adoption.

In a community where many survive on roughly one dollar a day, a small but growing number of residents now hold bitcoin, and some merchants and motorcycle taxi operators accept crypto payments, signalling a subtle yet promising shift in how money flows within Kibera.

The Positives and Pitfalls of Bitcoin

Damiano Magak, 23, a garbage collector and food vendor in Soweto West, prefers using bitcoin over Kenya’s widely popular mobile money platform, M-PESA.

He cites lower transaction costs and faster processing times as key reasons.

While M-PESA offers free transfers up to 100 Kenyan shillings (about 78 cents), fees increase with larger amounts.

In contrast, transactions on the Lightning Network, introduced by AfriBit Africa, carry no fees for users.

Another collector, Onesmus Many, 30, feels more secure holding his money in a bitcoin wallet rather than cash due to crime risks.

Local merchants like Dotea Anyim have also embraced crypto, with roughly 10% of her vegetable stand customers paying in bitcoin.

She explained:

"I like it because it is cheap and fast and doesn’t have any transaction costs. When people pay using bitcoin, I save that money and use cash to restock vegetables.”

The prospect of bitcoin’s price appreciation appeals strongly to many residents.

Magak and Many reveal that 70% to 80% of their net worth is now held in bitcoin—an exposure level far above average.

Magak noted:

"It is my worth and I’m risking it in bitcoin.”

This growing reliance raises concerns for Ali Hussein Kassim, fintech entrepreneur and chair of Kenya’s FinTech Alliance:

"In an extremely volatile asset like bitcoin, it’s overexposure. I can’t afford to lose 80% of my wealth. How about a guy in Kibera? You are exposing a vulnerable community to an ecosystem and to financial services that they can’t necessarily afford to play in.”

While acknowledging digital assets’ potential for cheaper cross-border payments, Kassim questions bitcoin’s value in Kibera, citing its volatility and lack of regulatory protections as risks that may outweigh transaction cost benefits.

Mdawida counters this view, arguing that bitcoin’s unregulated nature can be an advantage while emphasizing their commitment to bitcoin education and financial literacy programs within the community.

Despite global challenges—such as El Salvador and the Central African Republic reversing bitcoin’s legal tender status, and Kenya’s own regulatory crackdowns on cryptocurrency giveaways—this small-scale initiative in Soweto West continues to operate, offering a unique glimpse into crypto’s potential in underserved areas.

Magak pointed out:

"On my phone I put notifications on when bitcoin rises … and it’s all smiles. Whenever it fluctuates up and down, I know at the end of the day it will just rise.”