How a Kenyan Blockchain platform is helping homebuilders buy construction materials in small quantities

NAIROBI, Kenya, May 31 – If your dream is to build a home, but you do not know where to start, NyumbaMkononi says you can begin right in the palm of your hand.

The Kenyan startup operates a blockchain technology service that connects homebuilders to construction material suppliers by enabling them to buy material in small quantities from their mobile phones.

The firm’s CEO NaftalNyabuto told Capital Business exclusively that they have invested Sh30 million to build a solution that seeks to assist prospective homebuyers in tackling construction challenges by reducing costs by up to 30 percent.

How it works 

NyumbaMkononi uses a USSD mobile application-enabled system that gives prospective homeowners the architectural prototypes and estimations of materials needed based on their house size.

The company then gives the clients direct access to manufacturers they have pre-negotiated with to provide building materials at an already discounted rate.

“Using our blockchain, home builders can purchase materials in small quantities depending on their daily income. For instance, if one makes $2 from a grocery business, they can select the material they want and purchase a 1kg of cement right pay via M-PESA,” Nyabuto said.

He added that using their interconnectivity to suppliers, the purchase is stored in real-time and reflected into the client account as ‘material’. This allows a client to see their building materials wallet grow.

“We allow our clients to buy materials without storing them at the site where they can either be stolen or spoilt. The concept also helps clients not use the money haphazardly, as it cannot be diverted to other uses once committed to the platform,” the CEO said.

Nyabuto said the company hopes to reduce the cost of construction significantly by streamlining the value chain and eliminating brokers. He added that the company intends to give low-income earners access to affordable credit, expose them to cheaper construction alternatives and cushion them from price fluctuations.

Biggest problems

Capital Business asked Nyabuto what his biggest challenge had been, of which he listed convincing manufacturers and suppliers to join NyumbaMkononi. The CEO also listed streamlining construction value chains as another significant challenge.

To mitigate the hurdles, the CEO said the company had signed MOUs with various groups, including women groups, table banking groups in informal settlements, Chamas and Juakali Associations, to actualise the dream.

The company is working with workers in the informal sectors, medical and health staff, and BodaBoda associations, among others.