ChainLoan
Democratising micro-lending
ChainLoan is an innovative blockchain-based P2P micro-lending platform focusing on empowering financial inclusion for MSMEs in developing markets, with access of capital of retail lenders from wealthy nations.
Challenges in banking the unbanked
Currently around 1.4 billion adults worldwide are unbanked. Global Finance comparison shows financial exclusion rates: Middle East and Africa at 50%, South and Central America at 38%, Eastern Europe at 33%, and Asia-Pacific at 24%. Even in the most developed regions, like North America, approximately 21% of the population still faces financial exclusion.
While the microlending market is estimated to grow to a 370 billion USD industry by 2030, certain challenges in the traditional microlending industry are restraining the growth.
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Microfinance institutions (MFIs) typically generate capital through private equity, as they are not permitted to collect savings as traditional banks do to fund loans.
Significant sums of money borrowed from banks and other institutions (as high risk products) means that MFIs have to charge high-interest rates leading to high interest rates (ranging from 20-70% with an industry average of ~30%) and short payback terms, impeding market expansion.
Opportunities at the intersection of AI and blockchain
With the high penetration and accessibility of mobile phones even in low income regions, default rate prediction can be reliably derived from mobile money transaction data. Such assessment can be automated using AI, reducing the cost of assessment of individual loans. The use of blockchain as a medium of money transfer reduces the bank fees of cross-boarder capital transfer. Additionally, this opens up the possibility for retail investors to invest into micro-loans, a wider source of capital will likely lead to a decrease in the cost of capital (i.e. interest).
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DeFi can offer financial freedom and reduce poverty by offering cost-attractive services through mobile phones to individuals who are typically underserved by traditional banking systems.
Our Mission
ChainLoan's mission is to create a healthy ecosystem that connects capital supply from wealthy individuals and unbanked communities via blockchain, fostering financial inclusion by reducing the cost of capital for MSMEs and providing a microlending service with transparent capital flow
Our target users
On the borrowers’ side, the demographic of our target users are located in sub-Saharan countries where there are insufficient loans from banks and where mobile money is the main means of economic activities.
On the lenders’ side, the target users are individuals in wealthy nations who are interested in utilising their excess capital to facilitate small businesses in the aforementioned demography and region.
