The Microfinance Protocol

Financial Inclusion. 

This movement has had great progression in the last 40 years, it's been driven mainly by Microfinance Institutions and NGO’s, however it’s still not enough. Over 1.8 Billion adults are still unbanked.

A lot of Microfinance Institutions across the globe already work in an efficient way, but their scope is limited in terms of beneficiaries and sources of funding at a local or regional level.

Value Proposition

• To be a convenient crowd-source of funding for MicroFinance and NGO lending institutions to serve their customers
• To streamline the cross-border payments referred to the Microfinance value chain (funding, disbursements and repayments) based on crypto transferences.
• To provide a decentralized KYC based approach for Microfinance based on blockchain technology.

Business Model Canvas

Conceptual Architecture

The Microfinance Protocol is intended to improve and accelerate the Financial Inclusion, not starting from scratch, but leveraging and connecting at a global scale the current ecosystem: Lenders, NGO's and Microfinance Institutions. So it will sit in the middle of this ecosystem to help them reach more people in a more efficient way breaking the border limitations through the Decentralized Finance model. 

The end beneficiaries are the millions of people still unbanked and financially underserverd across the globe. 

Currently I'm the only one developing this idea. I'm an IT professional from Mexico with more than 20 years of professional experience currently  employed at Google Cloud in San Francisco, serving Financial Services Companies. 

Most of my professional background is related to the Financial Services Industry, but specifically I've dedicated more than 10 years to the Microfinance Industry.  Back in Mexico I worked for Gentera and Financiera Independencia, 2 of the most important Microfinance Institutions in the country, so I am deeply familiar with the model and the purpose.

On the personal side, I'm the result of years of hard-work from my parents, with a speciall call to my mother who lacked of formal financial opportunities, and despite it, she managed to get ahead financially and support her family.

As a Mexican, I'm also familiar with the unfortunate situation in my country of socioeconomic inequality and lack of opportunities for millions of Mexicans, and I have seen how many of them manage to get by with little opportunity.

Personally I have written a book about emerging technologies intended to help Latin American SMB's to get the most of the technology and somehow help to close the financial and technological gap in Latin American Countries.

Link to Book in Amazon

in Conclusion, I have been close to the problem (at a regional level), but I'm also aware this is a global challenge that needs to be addressed. With a little help and the right contacts, this idea could be executed and tested in the short term considering all the components already exists.

Not a materialized project yet.

I'm here mainly to share my idea and get the right help to tune it, I'd love to get the help of Web3 and Microfinance Experts. I think it would be extremely helpful to get connected with Global Firms and Institutions like CGAP and Kiva.

It will use some of the most important emerging technologies and paradigms:

Blockchain. MF Protocol will be a Web3 based platform, meaning it will rely on different blockchains to implement NFT based contracts and services to integrate the different Microfinance Ecosystem Entities (MFIs, lenders and eventually borrowers).

Machine Learning. On top of the smart contracts, MF Protocol will be extended with analytical and ML solutions to improve the end to end lending experience, implementing use cases like “credit risk assessment”.

API Platform. The platform will be managed through “API’s” or “endpoints” that will automate as much as possible the onboarding and enrolling process for lenders, MFI’s and any other entity that will participate in the ecosystem.

Cloud Platform. All of it will be based on public cloud services (like Google Cloud platform ar AWS) to avoid upfront investments and operational costs related to infrastructure.

Considering all these components, this intends to be a Microfinance "middleware" that will connect the global ecosystem in a friction-less and agile way.

I'm attaching an image with a draft roadmap for the following 3 years

• Number of lenders and microfinance Institutions enrolled in MF protocol
• Number of micro-loans disbursed through micro-finance protocol YoY
• Monthly Payments and disbursements amount 
• NFT based Credit Score / KYC Adoption YoY (number of users enrolled)

Blockchain. MF Protocol will be a Web3 based platform, meaning it will rely on different blockchains to implement NFT based contracts and services to integrate the different Microfinance Ecosystem Entities (MFIs, lenders and eventually borrowers).

Machine Learning. On top of the smart contracts, MF Protocol will be extended with analytical and ML solutions to improve the end to end lending experience, implementing use cases like “credit risk assessment”.

API Platform. The platform will be managed through “API’s” or “endpoints” that will automate as much as possible the onboarding and enrolling process for lenders, MFI’s and any other entity that will participate in the ecosystem.

Cloud Platform. All of it will be based on public cloud services (like Google Cloud platform ar AWS) to avoid upfront investments and operational costs related to infrastructure.