EthicHub

Iñigo Molero. Bachelor of Law, Master in Journalism. Co-author of the book "Blockchain: the industrial revolution of the internet" Analyst in Gold and Finance, Digital newspaper of money: Compilation and analysis of information on the financial system and BRICS. Specialized in topics related to Blockchain technology and BITCOIN. In love with w

Communications an BD Manger in EthicHub

EthicHub improves the socioeconomic conditions of small farmers in developing countries, facilitating their financial inclusion, increasing their productivity, improving the sales conditions of their production and creating a credit digital identity that can be used in other areas.

EthicHub wants to universalize access to the global financial market, connecting investors with solvent projects of small farmers that are the majority of the 1.7 billion people still excluded from the global financial system, thus benefiting both parties: Less interests for farmers and good profitability for investors. For this, we have a P2P platform based on Blockchain that connects investors with small agricultural communities around the world. Our platform is already working.

Thanks to Blockchain, the growing industry of Crowdlending transcends borders and becomes global: Today, accessing the unbanked population is profitable.

EthicHub main objective is to contributing to financial inclusion of millions of small farmers (unbanked) with profitable activities. Lack of access to credit is considered one of the most important causes limiting economic growth and increasing inequality in developing countries (Hermes, 2014 and Li et al. 1998). Only the impact of corruption is bigger. This can be explained by the circle of poverty: low income prevents savings which, in turn, impedes the ability to invest and improve productivity to improve income. In conclusion, this misallocation of capital represents an obstacle for developing countries` growth and it is mainly produced by ignorance. Therefore it can be reduced/eliminated by providing information and transparency to the system, enabling better knowledge of these investment opportunities. And all this is possible thanks to the great financial innovations that are emerging during the last years as is the case of the Blockchain. In this regard, Cull et al. (2014) states that financial innovations have the potential to significantly reduce transaction costs, extend financial inclusion and promote economic growth.

EthicHub is a high-impact Agrofintech that merges Crowdlending and Contract Farming to connect smallholder farmers with international lenders and direct buyers, without intermediaries: Groups of eligible farmers with a profitable productive activity are selected by a Local Node (project collector) to apply for collective loans. Thanks to Blockchain, the growing industry of Crowdlending transcends borders and becomes global: Today, accessing the unbanked population is profitable.

EthicHub connects complementary economic regions: Emerging countries where smallholder farmers do not have access to sufficient resources to thoroughly work their lands, with developed countries where there are even negative rates for money deposited in banks, plus Contract Farming (a FAO’s initiative) to secure the purchase of the crops at market prices, so lenders can be more confident that farmers will have the means to pay the loans back, creating value for all parties: Mutual benefit becomes a true driver for economic sustainable development and a powerful tool to massively incorporate the  unbanked into the global economy.

We are not financial intermediaries: We provide the technological platform for lenders , and borrowers (focus on smallholder unbanked farmers) to connect with the help of Local Nodes who select the eligible farmers.

We have invested more than 18 months in building the platform and developing a successful pilot. We are already working in Chiapas, Mexico, providing loans from more than 600 international lenders to 200 unbanked farmers on the first 9 communities. In this time a total of $200 000 USD has been send to the unbanked farmers. The lenders have already recovered their investment with a return of 15% and the unbanked farmers has paid in all cases (100% success). We have a global vision but only small coffe producers in Mexico needs around 700 M $ each year. In global scenario we are talking over of billions.

This year we are looking for to be present in a second countrie and some others crops. We also want to keep improving our platform with new and better updates. We have a global vision so in 5 years we will love to be present in several countries all around the planet and we hope that millions of unbanked farmers can join us and break the circle of poverty. 

EthicHub is looking for a High Impact and contributes to 7 of the Sustainable Development Goals of the UN 2030 Agenda. Universidad Autónoma de Madrid -a Spanish public university- will carry out the measurement of the impact to demonstrate that participating in EthicHub’s microfinance program is related to changes in the socioeconomic conditions of the participant farmers. Positive results would justify the investment made in the start-up by their funders (Lacalle-Calderón, 2007).

I knew the co-founders (Jori Armbrustes, Gabriela Chang and Raúl Marinez) long time ago. They told me about EthicHub and I felt in love. EthicHub has two things that I love so much; Blockchain technology and positive impact. I worked for many years in NGOs but Ethichub is a social enterprise. And that is the future. 

The global impact 

The total potential size of eligible farmers we have identified just for the country of Mexico is a staggering 180,000. Imagine now the potential this has on a global scale.

The lenders on the other hand make sure our farmers are provided with the necessary financing to carry out their farming activities. As you may already know EthicHub`s main proposal is to create mutual benefit, where both sides gain, which results in a fairer distribution of wealth. Farmers get easier and cheaper access to financing and investors and lenders can achieve a very competitive annual interest rate of up to 15%. This is possible due to the large difference between what farmers usually pay locally for cash loans (crazy interest rates of up to 120% are not uncommon) and the frustratingly low interest markets where our lenders are based. Via Blockchain and without any intermediaries we bring both sides together and make this economic exchange happen. Our working prototype of the platform can count on already more than 600 active lenders, which is remarkable since hardly any investments have gone into marketing so far.

All the team loves what we are doing. Take a look to our founders

Jori Armbruster  true blockchain believer and Co-Founder and Coordinator Node of EthicHub, Jori aims to disrupt the current financial lending system by creating a fair global crowd lending system. Jori’s extensive experience includes running a coffee farm overseeing more than 400 employees in Mexico, and accumulating additional experience in operations, HR, and business development. He went on to become CEO of an 880+ employee company in Spain and got acquainted with blockchain during his MSc in Innovation

Gabriela Chang was the founder of Blokchain and women. She has a Univ. Degree in Industrial Design and Product Development. Previous experience: Co-owner of an organic coffee estate. Founder at DayDreaming, Madrid. Senior Designer at the Ministry of Economic Development, Chiapas, Mexico.

Raúl Martínez / CTO. Industrial Electronic Automation, Industrial Technical Engineer. Associate Professor in U-tad teaching Development of Mobile Platforms, Swift & iOS. CTO, R & D software engineer at Samsung Electronics. Mobile technology consultant for Roduly Wonder Soft. Being a technology enthusiast and entrepreneur, Raul has researched, developed and lead the development of mobile apps, AR, web technologies, and smart contracts. His experience includes tech consultancy, building up a software engineering department for Samsung, teaching mobile platform development as associate professor, and managing development teams as CTO. After learning about the possibility to rewrite value transfer with Blockchain, he joined EthicHub to disrupt global economics and improve the world by providing impact investment opportunities.

We create EthicHub with more ilusion than funding because we believe in what we are doing. And we have been working for free at the beginning. 

We believe in a world with equal access to opportunities and we want to contribute to make equal rights to every citizen of the world a reality. Correcting misallocation of global capital is our project’s main motivation, but also correcting many of the unfair aspects of the current financial system. Within our system, fees are conditioned to the real value of contributions so they are charged only in case of loan repayment. 

We believe in the community’s synergy and its members’ multiple ties and bonds value. We consider a community to be a group of people who interact with each other, generating value through these interactions: proximity, communication, trust, support, reference, commitment. For this reason, unlike other platforms, our risk assessment is carried out by people who personally know the borrower (Ethic partner/project collector).

We believe in mutual profit as wealth generator.

Our CEO, Jori Armbruster is half-Mexican, half Spanish. He has been living in both countries and he has been concerned about the big difference regarding the cost of money in these two worlds. "In developing countries, there is a lot of money and for that reason is very cheap. We don’t get any interest for our savings in our banks. On the other hand, there are countries where the money is expensive because they don’t have it. Just think of what happens in Mexico, where we started. Small producers must pay over 100% interest rates for the money they ask in cash. Sounds crazy, right? But they are able to pay back the loans because they have a profitable activity and they are hard workers. I always thought that this difference does not make any sense when all of us are living in the same planet".

EthicHub was born around this reality. "And it started to become my main focus when I read that the unbanked were ¼ of the world population and that crowdlending was growing exponentially" but there were very little crowdlending for the unbanked farmers. "Until I discovered blockchain I did not realize what the solution was".

Crowdlending platforms grow at rates of more than 100% per year thanks to the fact that they offer to eliminate intermediaries in the financial sector by putting lenders and borrowers in contact. Blockchain allows a new level in the development of the crowdlending sector by improving security and transparency, facilitating international transactions between strangers.

We are pioneers in this new concept of global economy because we are convinced that it has gone from being an imminent future to materializing in the present.

Without the recent development of Blockchain technology, none of this would be possible

EthicHub is a so called social enterprise — a relatively new term that tries to explain a worldwide growing phenomenon. We talk about innovative projects, for profit, which must be profitable and sustainable over time. The fundamental difference with these new corporate structures is their firm commitment of resolving social or environmental issues with their business activities, meaning they help to generate a significant positive impact that is measurable.

For the impact measurement we are very fortunate to count on the collaboration of the Autonomous University of Madrid.  As a result of this collaboration we developed a scientific methodology that will be applied for impact measurement. It is one of the most fascinating parts of the project: Support these hard working farmers and help them to improve their activities, so they can break the circle of poverty, be profitable and develop socially and economically.

Our mission is Improve the socio-economic conditions of smallholder farmers in developing countries, facilitating their financial inclusion, increasing their productivity, improving their production’s sale conditions and creating a digital credit identity that can be used in the financial system.

here you can find it

We are currently working with these communities:  Las Delicias, Chespal, Chanjalé, San Rafael, Guatimoc, La Boquilla, Chespal, La Soledad y Salchiji . more that 200 small unbanked farmers. Hopefully in one year we can join 300 and in five years 5000 

Next year our main objetive is working on  our impact measurement. As I have said before we are very fortunate to count on the collaboration of the Autonomous University of Madrid, specifically Dr. Mari Cruz Lacalle an absolute expert in this area and director of the Master of Micro Finances. As a result of this collaboration we developed a scientific methodology that will be applied for impact measurement. It is one of the most fascinating parts of the project: Support these hard working farmers and help them to improve their activities, so they can break the circle of poverty, be profitable and develop socially and economically.

Therefore, at EthicHub we are working on creating our own certificate that incorporates the requirements of most current certificates, and add others from EthicHub.

This certificate will be issued annually by an independent agent (in the two months following the end of the harvest) and will be delivered to each farmer with the endorsement of his community and the local node. In the future, EthicHub will carry out an audit process both internally and by the user community.

Our certification includes three dimensions:

1- Economic.

2- Environmental.

3- Social.

This action should be done every year

EthicHub is native of Blockchain technology. The use of Blockchain technology provides the transparency and traceability necessary to make international transfers and allows a real Peer-to-Peer interaction thanks to Smart Contracts, decreasing costs related to the transfer of FIAT currency (conventional money).

We are not financial intermediaries: All movements of money are carried out by Smart Contracts. We provide the technological platform for lenders (focus on investors in Europe), and borrowers (focus on smallholder unbanked farmers) to connect with the help of Local Nodes who select the eligible farmers.

We write our own Smart Contracts and they are hosted in Ethereum -a public access blockchain- to guarantee their permanence and immutability, allowing total traceability and transparency.

So, if Blokchain technoloty falls, EthicHub will fall

We are pioneers in this new concept of global economy because we are convinced that it has gone from being an imminent future to materializing in the present.

Without the recent development of Blockchain technology, none of this would be possible:

Cryptocurrencies as a reliable means of transferring value are already accepted globally. They can be transferred almost instantaneously from anywhere in the world between people with a Wallet, without borders, safely, at low cost and high speed. In addition, thanks to the Smart Contracts based on the Ethereum Blockchain network, these transfers are subject to prior compliance with conditions established and approved by the participants.

Digital natives are now majority in developed countries and their familiarity with online interactions forms a mature market of investors, fully prepared for this technology that will revolutionize the way we perceive commercial exchanges.

If the hypothesis that Blockchain is a disruptive and transversal technology is true, practically all the citizens of the world will have wallets and cryptocurrencies in the future, so we are clearly in the Innovators phase or at most in the early adopters phase (visionaries).

Universidad Autonoma de Madrid

Cuatrecasas Acelerator

Ship2b Acelerator

Colaborativo Acelerator

AEFI (Spanish association of fintech and insurtech)

We are oriented to the financing of projects of positive impact, EthicHub is thought for small agricultural producers.

Our strategy to capture and evaluate projects is based on people. At EthicHub, Local Nodes are people linked to the community they serve. They benefit directly from maintaining and increasing their good reputation based on the accurate valuation of the projects they select. Local Nodes also generate another competitive advantage: they are the best way to identify users (probably the greatest problem of decentralized P2P loan platforms, since it is impossible to validate the existence, nor moral quality of someone asking for a microloan from across the world).This recruitment system is especially good for people who do not even have a smartphone and therefore it is almost impossible to make a risk assessment based on data.

EthicHub takes 4% of each loan repaid sucessfully and 3% for every sell in our platform. HereHere you can see it

We are based in scale economy. 

We have a global vision but only small coffe producers in Mexico needs around 700 M $ each year. In global scenario we are talking over of billions.

This year we are looking for to be present in a second countrie and some others crops. We also want to keep improving our platform with new and better updates. We have a global vision so in 5 years we will love to be present in several countries all around the planet and we hope that millions of unbanked farmers can join us and break the circle of poverty.  

We have closed a seed round for $1M last year

To close this seed round, the IDBLab, the innovation laboratory of the Inter-American Development Bank, stands out as a benchmark partner, which will contribute $ 600,000 to develop new platform functionalities, increase the number of small producers and lead a first EthicHub pilot to a second country.

We also want to highlight as a reference investor to Collaborative ($150,000), an important entity in the world of impact investing in Mexico, which selected EthiHub for its acceleration program and which has been extraordinarily enriching.

Rest from Business angels

We are looking for another seed round for $1M before A round

We have a bourn rate of $20,000 monthly

In December 2017, at the international conference LaBitConf held in Colombia we were awarded with the Blockchain4Humanity prize in the category of “Financial Inclusion”. In 2018, EthicHub was awarded with the Spanish FinTech 2018 Award in the category of Social Impact and few weeks later we also won the “ Design for Development” award as well as a mention in the area of “Service Design” at the Ibero-American Design Biennial (BID18). In june 2019 we have been awarded with the “project with more impact” in the Demo Day event organize by Ship2B, the most important Spanish accelerator for social Impact.

We have learn a lot of the experience and it will be a pleasure work with you and lear from you experience

Funding to keep going and mentorship to improve our vision and business model

Blockchain developers, fintech, agrofintech