Fidutam

Presently, an astounding 2.5 billion adults worldwide are classified as ALICE: Asset-Limited, Income-Constrained, Employed. These individuals often fall off the radar of traditional banking systems, which are inclined to cater to clients with larger capital holdings. Consequently, more than 90% of the ALICE population remains unbanked, deprived of crucial financial services.

The repercussions of this financial exclusion are severe. Without a bank account, fundamental financial activities, such as cashing checks, paying bills, and saving personal capital, become excessively challenging. These individuals face heightened risks and inflated costs in almost all financial transactions. The absence of financial support leaves them, and their funds, vulnerable. It's therefore unsurprising that the unbanked population constitutes a significant portion of the global poor. Over 93% of this group come from low-income, resource-scarce communities where economic and financial limitations are the norm.

To develop a sustainable solution, we must identify the root cause of the unbanking crisis. In 2021, an alarming 92% of unbanked individuals attributed their lack of a bank account to inadequate identification—such as a Social Security Number, taxpayer or government-issued photo ID, or proof of address—or physical accessibility issues like distant banking facilities. This data was substantiated by a two-year follow-up study conducted by Fidutam in low-infrastructure communities across Nigeria, China, and Pakistan. Our research showed that 91.4% of the 442 respondents identified one of these two issues as the main obstacle to banking.

Despite these insights, most existing solutions sidestep these root causes, preferring their corporately convenient offerings of low-cost financial planning and prepaid debit cards. These interventions have seen limited success among the unbanked population, allowing the unbanking crisis to perpetuate global poverty.

Fidutam is taking a different approach. We're developing a solution that prioritizes sustainability and accessibility, offering a digital, resource-light application process. But our commitment goes beyond providing a tool; we're also addressing the potential issue of financial segregation. To prevent the creation of a separate banking ecosystem for low-income and unbanked individuals, we're offering microloans. This financial mobilization strategy empowers our users to ascend the economic ladder and gradually integrate into traditional banking systems. This approach contrasts with proposals to create entirely new, isolated banking processes, which often perpetuate socioeconomic division. With Fidutam, we're working to bridge the gap, not widen it.

Fidutam is a microlending platform designed to navigate around the bureaucracy of traditional banking without infringing upon users' financial independence. The platform is accessible via instant messaging apps such as WhatsApp and WeChat, where an automated bot assists users in identifying nearby community centers, such as churches and parks, that have partnered with Fidutam to provide SIM cards preloaded with the app.

The decision to load the app onto a SIM card ensures broad accessibility for users, even those with basic, 2G mobile devices. A handheld device prototype is also under development to cater to individuals without a phone. This is not our primary focus, however, considering that nearly 87% of the world population has a phone. People are more likely to have a cell phone than a clean toilet, according to the UN! 

Once the SIM card is installed, the user is prompted to input their personal information, like name, address, and ID if known, followed by a request to upload or take a selfie image. A convolutional neural network processes the selfie image, breaking it down into individual pixels. These pixels' color hex codes, combined with the user's entered credentials, are encrypted and encoded into a hash function. This function has both public—for third parties—and private—for the users—identifiers, akin to how a Gmail account operates. The hash is stored on Fidutam's Hyperledger Aries blockchain and is accessible to users via a QR Code, serving as a validated, self-sovereign identity (SSI) for online payments and verifications.

The SSI is linked to a digital wallet, enabling users to request microloans of $50, $75, or $100. Fidutam can distribute these loans either digitally or as physical currency. By recording all loan transactions on the blockchain's decentralized ledger, Fidutam maintains a comprehensive view of all loans, ensuring they are repaid within a year, with exceptions made for users facing extenuating circumstances or delayed profits. Importantly, Fidutam's system performs computation off-chain, meaning it doesn't require internet or electrical inputs.

Product demo link here.

Fidutam is designed with a specific focus on the world's 2.15 billion unbanked individuals, including 1.4 billion adults. Our primary objective is to improve their lives systematically by helping them overcome the barriers to traditional banking, with a lack of identification being the most common impediment. We aim to provide these individuals with access to small amounts of capital, enabling them to grow their assets, support their families, and eventually qualify for a traditional bank account. Given that the unbanked population often resides in resource-scarce areas and belongs to marginalized groups like BIPOC, refugees, women, and ALICE, the unbanked crisis's effects are amplified, necessitating a solution that is effective, feasible, and accessible.

Our target demographic spans both urban and rural areas, often characterized by limited resources but similar financial needs. In the US, factory and agricultural workers are especially susceptible to financial exclusion. This segmentation is applicable to the global unbanked population as well, particularly in countries like Ukraine, Iran, and China, where high unbanked populations often coincide with human rights violations against working and middle-class citizens. Currently, our primary focus lies in serving individuals keen on starting local businesses or projects, effectively treating each user as a Micro, Small and Medium Enterprise (MSME). These individuals are poised to derive maximum value from the microloans they receive. We also actively collaborate with on-ground partners such as credit unions, economic ministries, and banking-focused social equity coalitions to provide financial advisory and oversight to our users, many of whom may lack financial literacy.

To illustrate the individual impact we've had thus far on the unbanked, consider these examples:

• Micayah, a machine operator from the Bronx, New York, turned a $50 microloan into a $5,000 profit by selling refurbished combat boots within her community.

• In Nicaragua, users are utilizing Fidutam's $75 and $100 microloans to build and rent out homes, working in collaboration with the Rino Foundation.

• Kenyangi, an undocumented woman in Uganda, used Fidutam's platform to gain a valid form of ID, which she then used to register to vote and secure higher wages in her job as a traditional birth attendant. This earned her an additional $170 per month in income.

To date, Fidutam has provided over $400,000 in financial assistance to unbanked communities, demonstrating the tangible impact our platform can have.

As a Nigerian and a person of color residing in the US, I've witnessed firsthand the detrimental effects of racial disparities in banking and finance on communities. I've seen the struggles of Black-owned businesses, families unable to secure essential loans, and entire neighborhoods suffering from poverty due to a lack of banking services. These realities are not confined to the distant corners of the world; they are prevalent in our everyday lives, fueling stereotyping and racial hegemony, which stagnates progress regarding other issues that are deeply entrenched within our social fabric, such as housing discrimination and police brutality.

With a background that encompasses research, entrepreneurship, and advocacy, I am uniquely positioned to lead, develop, and implement Fidutam. My experiences as a Research Science Institute (RSI) Scholar, a highly prestigious pre-collegiate research distinction, have equipped me with the necessary research acumen. My time spent conducting research at esteemed institutions like Harvard and MIT has further honed this skill. I have also ventured into the entrepreneurial world, having released a cryptotoken named OkezCoin on the Ethereum MainNet and built a low-cost prosthetic arm for individuals with below-the-elbow amputations. As an advocate for STEM, I have conducted workshops, mentorship sessions, and innovation talks, reaching over 75,000 youth and professionals across 80 countries. These experiences have prepared me to understand and address the needs of both the technological and community aspects of our work. As an incoming freshman at Stanford, I will also gain access to a unique community focused on combining technology with humanitarian goals.

Fidutam was launched in 2020, and since then, we have assembled a team of 24 supporters and advisors. Our team includes 11 individuals from low-income, unbanked communities, who provide invaluable firsthand insights while being compensated for their contributions. In fact, much of our solution was born out of the needs voiced by our unbanked advisors and our global-wide studies with support from the United Nations Association, Bureau of Economic Analysis, and the World Economic Forum. We also have 7 research and development advisors from leading organizations like Consensys and IBM. Additionally, our team includes 6 business advisors from companies such as Capital One, Wells Fargo, and OPay. We are actively working with these business advisors to develop partnerships with the companies they represent. 

Our work with Fidutam has gained international recognition, leading to us winning $250,000 in awards and receiving honors from the Cutler-Bell Prize, NASDAQ, Prudential, the NASDAQ Center for Entrepreneurship, and more. These experiences and accolades underscore our team's ability to deliver this solution effectively. 

In our first pilot, Fidutam served 212 ubanked families across Chicago, IL, the Bronx, NY, and Allentown, PA. These users have since been on Fidutam’s platform for over a 11 months and our now using our platform independently. We have also launched a 927-person pilot across sub-saharan Africa, including Nigeria, Uganda, Ghana, Kenya, and Cameroon. Finally, we have partnered with the Rino Foundation to scale our microloans to 10 families in Nicaragua. Outside of pilots, Fidutam has hosted financial literacy and beta testing workshops that have reached 11,476 low-income youth and adults (these are not pilot users, but individuals who have tried and learned about Fidutam’s system). In total, Fidutam has served 1,139 unbanked individuals in total, reached 12,615 people, and provided $401,662 in value to the unbanked community. By the end of 2023, we hope to have run another pilot campaign across North America, and have been receiving interest from South Asian and Eastern European ministries as well.

Applying to MIT Solve represents an opportunity for Fidutam to not only secure critical resources for scaling our work, but also to become part of a vibrant community of change-makers that can provide us with valuable insights, connections, and potential collaborations.

While funding is an essential element for our growth, we understand and appreciate the value of non-monetary support. We face several challenges that we believe Solve can assist us with:

1. Technical Expertise: As we continue to innovate and improve our blockchain technology, we could benefit greatly from the technical mentorship and guidance that the Solve community could provide. We are particularly interested in gaining insights on enhancing our technology's scalability and security.
2. Market Barriers: Expanding our reach to different regions comes with its own set of challenges, including understanding diverse financial landscapes and navigating complex regulatory environments. The diverse backgrounds and experiences of the Solve community could provide us with valuable insights and connections to overcome these barriers.
3. Legal Guidance: As we expand globally, we must comply with various legal frameworks regarding financial services and data privacy. Access to legal expertise, which the Solve community could potentially provide, would be invaluable in this context, especially since we are trying to scale to countries such as China, Ukraine, and potentially even North Korea (which are proving to be extremely difficult given their current political and governmental landscapes).
4. Cultural Understanding: Given our commitment to diversity, equity, and inclusion, we need to understand the unique cultural contexts of the communities we serve better. We believe the Solve community, with its wide geographic representation, could offer valuable cultural perspectives and insights. Solve has people from several walks of life working on-ground in dozens of countries, which could provide much needed firsthand perspectives for Fidutam to successfully roll out in new locations. 
5. Networking Opportunities: We are eager to connect with other innovative organizations and individuals who are working towards similar goals. The opportunity to collaborate, share knowledge, and learn from each other's experiences can significantly enhance our impact.

In summary, our goal in applying to Solve is not merely about securing funds but about joining a community that can provide us with a comprehensive support system to help us advance our mission more effectively. There are also few organizations that offer such an extensive amount of non-dilutive funding; Solve’s funding is especially attractive since it would be through an organization whose goals of financial inclusivity are also quite closely aligned with Fidutam’s.

Fidutam's innovation lies in its application of blockchain technology to address the challenge of financial exclusion for unbanked populations. We leverage blockchain to eliminate the requirement for conventional authentication, thus creating a pathway for individuals with limited or no identification, such as immigrants and the undocumented, to access financial services.

We generate unique private signatures from an array of data including a selfie, name, personal information, and location. This ensures a secure, personalized form of identification for each user. By employing a decentralized ledger, we've dramatically cut the costs associated with setting up bank accounts, making our service accessible and affordable for a larger demographic. Importantly, our technology specifically targets the issue of financial documentation, which is recognized as the primary obstacle for the unbanked.

Our microlending model facilitates scalability without the need for significant funding. We are essentially digitizing an already successful financial process. The platform, installed on a SIM card and accessible via instant messaging, ensures that even those with basic phones can access our services, thus widening the reach of our solution and fostering inclusivity and diversity.

Fidutam's approach goes beyond the conventional tech concept of 'banking the unbanked'. Our aim is not just to create a new banking system for low-income individuals, but to facilitate their upward mobility and integrate them into the formal financial sector. We're developing partnerships with credit unions and small, trustworthy, on-the-ground banks willing to adopt Fidutam’s profiting users as customers. This integration into existing financial dynamics makes it easier for our technology to systematically address unbanking for our users.

Additionally, we place a strong emphasis on digital and financial literacy. Through workshops and user engagement, we prepare our users to become bank customers. The success of our current users, combined with low documentation and processing costs, means that as these individuals transition from being unbanked to banked, the financial institutions supporting them can anticipate moderate to high-profit margins. This offers an incentive for banks to adopt Fidutam’s technology.

Our solution is not only novel in design and implementation, but also flips the script on the conception of low-income communities. They are not burdened with debt, lazy, high-risk, or unintelligent, but instead victims of circumstance with incredible economic and mind potential that just need a small amount of financial support for that potential to bubble to the surface.

• Expand our sub-Saharan Africa reach to 3,000 people through partnerships with the Central Bank of Nigeria and each city’s Ministry of Finance and Economic Development, where 50% or more of our users are female.
• Successful scaling to China, properly navigating the existing policy regulations, and completing implementation in Vietnam, India, and Thailand to ~2,500 people.
• Host product demonstrations at homeless shelters and food banks in the United States, Canada, and Mexico in collaboration with J.P. Morgan, PSECU, and Goldman Sachs in cities with high unbanked populations.

Our pilots are held in hubs and public and nearby areas for the communities in need (e.g., shelters and churches). Fidutam’s application can scale to the most remote people and areas of the unbanked world, from women refugees, to homeless urban dwellers, to undocumented immigrants, to war or disaster-torn settlements. The application simply requires a phone, not access to the internet, money, a physical location, etc., making it the most accessible currently existing alternative to acquiring a bank account. Fidutam’s impact goals for the next year have been verified by the advisory team. We hope to see Fidutam materializing an equitable financial ecosystem in the near future.

To track our progress towards our impact goals, we are employing specific, measurable indicators aligned with our activities and expected outcomes. Some of these indicators include:

1. User Acquisition and Diversity: We aim to reach 3,000 people in sub-Saharan Africa and approximately 2,500 people in China, Vietnam, India, and Thailand. A key indicator of our progress will be the number of new users we acquire in these regions. Furthermore, we will measure the gender ratio among our new users, aiming for at least 50% female users, which will indicate progress towards gender equality in financial access.
2. Partnership Development: We plan to establish partnerships with entities like the Central Bank of Nigeria and various city Ministries of Finance and Economic Development. Tracking the number of successful partnerships and collaborations we establish will serve as a key indicator of our progress in expanding our reach.
3. Product Demonstrations: We aim to host product demonstrations in homeless shelters and food banks across North America. The number of demonstrations held, and the attendance at these events, will serve as indicators of our outreach efforts and the interest in our solution.
4. Pilot Success: Our pilots are held in various hubs and public areas. The successful completion of these pilots, and the number of users who sign up as a result, will serve as another measure of our progress.
5. User Feedback and Satisfaction: We will also gauge our progress by collecting unbanked user feedback through mass Zoom calls and on-ground meetings.

Given that most of our impact goals are quantitative, we will use a data driven approach to monitor progress, and collect qualitative feedback through our unbanked advisor members, who will help to facilitate conversations with Fidutam’s users to determine how well the platform has been working for them. We have already been using such methods to measure our current impact and efficacy.

Our theory of change is grounded in the belief that providing access to financial services can significantly uplift the unbanked population, by empowering them economically and fostering their upward mobility. Here is how we see our solution translating into impact:

Activities: Fidutam's activities include providing cost-free, blockchain-based banking IDs, microloans, and a digital wallet that acts as a no-fee, no-interest checking account. We also engage in partnerships with banks, credit unions, NGOs, and on-ground organizations to ensure our services reach the people who need them the most.

Immediate Outputs: The immediate output of our activities is the increased financial inclusion of previously unbanked individuals. This is achieved by bypassing conventional barriers to banking, such as documentation, and leveraging mobile technology to provide access to financial services. The result is a surge in the number of people who can save, invest, and manage their money, which directly contributes to their financial autonomy.

Longer-Term Outcomes: Our solution is designed to facilitate the upward economic mobility of unbanked individuals. By providing access to bank accounts, microloans, and a soon a partner platform to transition users out of being unbanked, we expect to see a rise in economic activity and growth in these communities. As these individuals generate revenue, their financial status improves, and so does the economy of their communities. Additionally, as their accounts grow, the financial institutions supporting them also benefit, creating a sustainable cycle of growth.

Evidence of Impact: The evidence supporting our theory of change lies in the proven potential of financial inclusion to drive economic growth. Numerous studies, such as those conducted by the World Bank and the United Nations, have demonstrated the transformative power of financial inclusion in lifting people out of poverty and driving economic development. Furthermore, our ongoing engagement with the target population and their positive feedback serves as direct evidence of the impact and potential of our solution.

Fidutam was built using a combination of Java and Python, with the front-end being implemented using JavaFX library and the back-end utilizing the Flask web framework. For management and distribution, I employed Apache Cassandra and converted Fidutam into a SIM applet using the Java Card technology, which allows the application to be executed on a SIM card, eliminating the need for an additional device and ensuring scalability. Using the WhatsApp Business API and Twilio Library, the app is hosted on the familiar WhatsApp interface. 

For user authentication, Fidutam utilizes the Hyperledger Aries with Interledger Protocol for the payment channel implementation and IPFS for off-chain storage of the user's data and transaction history that allow for transactions to occur without the need for constant internet connectivity or electricity. With the uPort SDK and Hyperledger protocol, decentralized identities (DIDs) and verifiable credentials are used to construct user’s digital signature on the blockchain. 

The digital signature is then added to the Hyperledger Fabric blockchain. Fidutam uses the AES-256 encryption function to hash the user's personal information, selfie image, and satellite coordinates, creating a unique digital signature for each user. With QRCode, a QR code with a unique identifier that corresponds to the user's public DID and wallet enables secure third-party financial or ID-based interactions. For loading or spending money, Fidutam uses a smart contract that triggers a pre-determined $50-100 to be transferred to the use upon successful verification of their identity through the QR code linked to their public identifier. With each bank ID being stored on an immutable, decentralized, distributed ledger, the cost of obtaining documentation for opening a bank account is 0.33 cents.

At Fidutam, we understand the importance of diversity, equity, and inclusion (DEI) and we are committed to incorporating these principles into every aspect of our work. Our approach to DEI is both internal, focusing on our team and leadership, and external, considering our users and beneficiaries.

Internally, we strive to build a diverse and inclusive team, which we believe is fundamental to developing solutions that effectively serve diverse populations. We do this by actively seeking team members with different backgrounds, perspectives, and experiences. We also ensure our leadership team reflects the diversity of the communities we serve. This includes diverse representation in terms of race, ethnicity, gender, socioeconomic background, and experiences. We believe this diversity enriches our discussions, decision-making processes, and ultimately, the solutions we provide.

Externally, our product is designed with a focus on equity and inclusion. We aim to serve all types of unbanked individuals - refugees, single parents, those living in poverty, orphans, domestic abuse victims, and more. We recognize that different racial and ethnic groups may face unique challenges in accessing banking services, and we are committed to understanding and addressing these challenges. For example, we are actively working on expanding our reach to various regions around the world, including diverse spheres of Asia and Africa, and ensuring that our services are accessible and useful for different racial and ethnic groups, including White and Hispanic populations.

We also consider diversity, equity, and inclusion in our partnerships, collaborating with organizations that align with our DEI values and can help us reach and serve diverse populations. In summary, DEI is not just a set of principles for us; it is a commitment that is woven into our strategic goals, operational policies, and day-to-day activities. We continue to learn and evolve in our DEI journey, always open to feedback and new perspectives to make our work more inclusive and equitable. Given that our solution was founded by a Gen Z, one of the most diverse and thoughtful generations of all times, we are poised to ensure as many voices as possible are considered and incorporated into our work, evidenced by our team, current users, and impact.

Fidutam's business model is centered around providing access to financial services to the unbanked population, empowering them to engage in the economy and improve their financial status. Our solution is to offer them a no-cost ID, enabling them to set up accounts without the need for internet, electricity, additional devices, or physical bank access. This process is facilitated through their mobile phones using an instant messaging and blockchain-based solution.

Our service offering includes a digital wallet, which acts as a no-fee, no-interest checking account, enabling users to save, grow, and effectively manage a small amount of capital. By offering microloans, we provide an avenue for financial growth and economic access that was previously unavailable to these individuals.

Our partnership with on-ground ministries and bureaus ensures that there is a high level of trust and transparency between our users and our products. This also helps to ensure that our services are reaching the people who require them the most.

Our revenue model is designed to be mutually beneficial. Banks, credit unions, NGOs, and on-ground organizations have shown support for Fidutam’s solution, recognizing the need for equity in the financial landscape. By using Fidutam, banks can foster economic growth in developing areas, leading to a high return on investment with each account they facilitate, especially given the low cost of generating a bank ID through Fidutam's use of blockchain technology.

The main barrier to financial access for the unbanked population is documentation, and Fidutam's solution directly addresses this. Once the unbanked are given access to bank accounts, they can begin to manage and control their finances with a high level of autonomy. As they generate revenue, invest, and own capital, their accounts grow - and as their accounts grow, so do the returns for Fidutam and our financial partners. It is important to note that Fidutam does not cut into the profits of unbanked communities it’s supporting, but instead earns revenue from its credit union and bank partners, who are receiving customers as a result of the platform. In this way, our business model not only provides a solution for the unbanked but also creates a sustainable source of revenue for our company and our partners.

As an organization currently planning to file as a social enterprise (501c(4) or hybrid corporation; tax-deductible donations can be made), Fidutam will not solicit payments from any of its users or on-ground facilitators. We have already been able to earn over $250,000 in awards and an additional $50,000 in gratuity, used for development, processing, software, planning, and implementation. SIM card development and installation is currently and will continue to be our largest expense, and we have been able to fund 5,000 users worth of chips. We are also looking to set aside funding for our physical prototypes for users who don't have mobile device access.

Fidutam is still in the process of securing additional non-dilutive investments, including donations and grants, before filing as a social welfare organization or hybrid corporation status. We will then pursue fundraising rounds. As a member of the Softbank Corporation through the Masason Foundation, I have access to device and supplies support, as well as a small funding network from Fidutam.

Fidutam also plans to earn revenue through a partnership with banks who choose to become a pipeline through Fidutam’s platform for users ready to enter formal banking. As users’ formal banking accounts begin to grow, its partners facilitating the accounts, will receive a small percentage of the returns as normal, but will also pay Fidutam a percent of the revenue they receive from Fidutam-sourced customers. This financial system ensures that our users are still able to reap all the benefits of growing their accounts and retain a majority of their funds. I have begun talks with Fidutam’s advisors and partners on such a revenue model. With this plan, we anticipate that Fidutam will continue to be a profitable, sustainable, and effective solution to banking the unbanked.

Fidutam has received funding from Prudential and Ashoka through the Emerging Visionaries Award, the Association for Computing Machinery and the Computer Science Teachers Association through the Cutler-Bell Prize, Softbank, the Masason Foundation, and more. 

We have also received support/funding from the following organizations: 

J.P. Morgan, Visa, PSECU, and Goldman Sachs: Receiving advice and support from them regarding technology, implementation strategies, and product development. In talks with their innovation teams on how best to scale Fidutam to communities in need.

OPay and Nigerian Federal Government (Bank, Ministry of Economic Development): Getting connected with on-ground Nigerian payment services and banks to roll out the solution with unbanked Nigerian communities. Looking at gender, socioeconomic, and humanitarian disparities as they affect banking, financial services, and economic development accessibility on a continent-wide and semi-global scale.

Wells Fargo, Capital One, and Discover Bank: Receiving support and working on partnerships to establish them as our partner banks to be hosted on Fidutam’s instant messaging platforms; supplying no-fee checking accounts to Fidutam’s unbanked users, and determining/analyzing returns from the growth of the checking accounts provided.

United Nations Association: Helping to organize pilots in select unbanked communities and financial education workshops hosting, as well as determining how Fidutam helps to further the goals and impact of SDGs #1: poverty, #8: decent work and economic growth, and #11: sustainable cities and communities.