Decentralized Microloan Platform on Cardano

[GENERAL] Name and surname of main applicant

Abdu Mohammed Kebede

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Individual

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

We will develop a decentralized microloan platform on Cardano, connecting local entrepreneurs with affordable loans to foster economic growth and enhance financial inclusion

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

Our project will be fully open source throughout its entire lifecycle, ensuring transparency and collaboration. We will create a dedicated repository on GitHub to host all project outputs, including code, documentation, and other resources.

We intend to use the MIT License for our project, which allows others to freely use, modify, and distribute our work, provided they credit the original creators. This license is widely recognized and promotes an open development environment, encouraging contributions from the community.

By making our project open source, we aim to foster innovation, enable peer review, and enhance trust among users and stakeholders. All aspects of the codebase will be accessible, ensuring that any community member can participate in its development and improvement. This approach not only supports the Cardano ecosystem but also helps build a supportive community around the microloan platform.

[METADATA] Horizons

Financial Services

[SOLUTION] Please describe your proposed solution

Our proposed solution is a Decentralized Microloan Platform on Cardano, designed to address the critical issue of financial exclusion faced by many entrepreneurs, particularly in underserved communities.

Problem Perception: Many small businesses lack access to traditional financing due to high-interest rates, lack of credit history, and bureaucratic barriers. This restricts their growth and the potential for economic development in their communities.

Approach: Our platform utilizes Cardano's blockchain technology to create a transparent, secure, and efficient microloan process. By leveraging smart contracts, we can ensure fair lending practices and reduce costs associated with traditional banking. This approach minimizes overhead and allows for lower interest rates, making microloans more accessible.

Target Engagement: We will engage local entrepreneurs, community leaders, and potential lenders. By fostering partnerships with local organizations and providing educational resources, we can create a supportive ecosystem that encourages responsible borrowing and lending.

Demonstrating Impact: We will measure our impact through several key performance indicators, including:

• The number of microloans disbursed.
• The success rate of funded businesses (e.g., revenue growth, job creation).
• User satisfaction and feedback collected through surveys.

Uniqueness and Importance: What sets our solution apart is its community-centric approach, where local stakeholders have a say in the lending process. This not only empowers entrepreneurs but also builds trust within the community. By promoting financial inclusion, we aim to stimulate local economies and align with Cardano's mission of creating a positive social impact.

In summary, our decentralized microloan platform offers an innovative solution to financial exclusion, leveraging Cardano's technology to empower local entrepreneurs, create jobs, and drive economic growth.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

The Decentralized Microloan Platform on Cardano aims to foster financial inclusion and community empowerment, leading to significant positive impacts on both local economies and the wider Cardano community.

Value to the Cardano Community

1. Economic Empowerment: By providing microloans to underserved entrepreneurs, the project will stimulate local economic growth. Successful businesses can generate employment opportunities, ultimately enhancing community welfare and contributing to the overall economic ecosystem within Cardano's network.
2. Blockchain Adoption: This project promotes the use of Cardano’s blockchain for real-world applications. By demonstrating the benefits of decentralized finance (DeFi) in a tangible way, we can encourage more users to engage with and support Cardano's technology.
3. Community Engagement: The project will foster partnerships with local organizations, enhancing community involvement and creating a sense of ownership among participants. This can lead to a stronger, more connected Cardano community.

Measuring Impact

• Quantitative Metrics:
• Number of microloans disbursed.
• Percentage increase in revenue of businesses receiving loans.
• Job creation statistics from funded businesses.
• Qualitative Metrics:
• User feedback through surveys assessing satisfaction with the loan process and its impact on their business.
• Case studies highlighting success stories of entrepreneurs who benefited from the platform.

Sharing Outputs

We intend to share our findings and results through:

• Reports and Publications: Regular updates and detailed reports will be made available on our website and shared with the Cardano community.
• Webinars and Workshops: Hosting educational sessions to discuss project outcomes and share best practices with other potential entrepreneurs and stakeholders.
• Social Media and Community Platforms: Utilizing platforms like Twitter, LinkedIn, and Cardano’s official forums to disseminate information and success stories, thus raising awareness about the impact of our project.

By creating a feedback loop between the microloan platform and the Cardano community, we will ensure continuous improvement and adaptation of our services, further enhancing the value and impact of our initiative.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Capability and Feasibility

Our project team possesses the essential skills and experience needed to successfully deliver the Decentralized Microloan Platform on Cardano. Our collective background includes expertise in blockchain technology, finance, software development, and community engagement. Here’s how we ensure high levels of trust and accountability in managing the project:

Existing Capabilities

Technical Expertise:

Our team includes experienced blockchain developers with a proven track record in creating decentralized applications (dApps) on the Cardano platform. This expertise ensures we can build a secure and efficient microloan system that leverages Cardano’s smart contracts for transparency and reliability.

Financial Management:

Team members have backgrounds in finance and microfinance, providing insight into structuring loans, assessing creditworthiness, and managing financial risks effectively. This knowledge is crucial in ensuring that funds are allocated appropriately and that the lending process remains sustainable.

Community Engagement:

We have previously collaborated with local organizations and communities, allowing us to understand their specific needs and challenges. This experience will help us effectively engage with potential borrowers and ensure the platform serves its intended purpose.

Steps to Validate Feasibility

Market Research:

Conduct thorough research to identify the target demographics and assess their needs for microloans. This will include surveys and interviews with potential users to ensure that the platform is tailored to their requirements.

Pilot Program:

Launch a pilot program in a selected community to test the platform's functionality, user experience, and loan repayment processes. This phase will provide valuable feedback and allow us to make necessary adjustments before a full-scale launch.

Partnerships:

Establish partnerships with local financial institutions and community organizations to enhance credibility and trust. These partnerships can provide additional resources and support for borrowers, increasing the likelihood of success.

Trust and Accountability in Fund Management

Transparent Financial Reporting:

We will implement a transparent financial reporting system, allowing stakeholders to track the allocation and usage of funds. Regular updates and reports will be shared with the community to maintain transparency.

Milestone-Based Funding:

Funds will be released based on the completion of predefined milestones, ensuring that resources are only allocated after demonstrating progress. This approach encourages accountability and responsible fund management.

Third-Party Audits:

Engage independent auditors to review financial statements and project expenditures. This external validation will build trust among stakeholders and assure them of the project’s integrity.

By leveraging our combined expertise and implementing robust processes for managing funds, we are confident in our capability to deliver the Decentralized Microloan Platform effectively and responsibly.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

A: Milestone Outputs

• Completed project plan document detailing objectives, timelines, and resource allocation.
• Conducted community engagement sessions to gather input and feedback on platform features.

B: Acceptance Criteria

• Project plan approved by all stakeholders.
• At least 50 community members participate in feedback sessions, with documented insights.

C: Evidence of Milestone Completion

• Signed-off project plan.
• Meeting notes and attendance records from community engagement sessions.

A: Milestone Outputs

• Functional prototype of the microloan platform, including smart contract implementation for loan agreements and transactions.
• User interface design for the platform, ensuring user-friendly navigation and accessibility.

B: Acceptance Criteria

• Successful deployment of the prototype on the Cardano testnet.
• Feedback collected from at least 20 users on the usability of the interface.

C: Evidence of Milestone Completion

• Testnet deployment logs.
• User feedback documentation and surveys.

A: Milestone Outputs

• Conducted a pilot launch in a selected community with real users applying for microloans.
• Collection of data on loan applications, approvals, and repayment rates during the pilot.

B: Acceptance Criteria

• At least 30 loan applications processed within the pilot phase.
• Positive feedback from at least 70% of users regarding their experience with the platform.

C: Evidence of Milestone Completion

• Pilot program report summarizing application statistics and user feedback.
• Recorded testimonials from pilot participants.

A: Milestone Outputs

• Comprehensive Project Close-out Report, summarizing project achievements, challenges, and lessons learned.
• Promotional video highlighting the project journey, outcomes, and impact on the community.

B: Acceptance Criteria

• Completion and submission of the Project Close-out Report to stakeholders.
• A video that meets quality standards and effectively communicates the project’s impact.

C: Evidence of Milestone Completion

• Approved Project Close-out Report.
• Published video on the project's official channels (e.g., YouTube, community forums).

[RESOURCES] Who is in the project team and what are their roles?

Project Team Overview

1. Abdu Mohammed - Project Lead

• Role: Overseeing the overall project execution, ensuring milestones are met, and managing communication with stakeholders.
• LinkedIn: linkedin.com/in/abdu-mohammed-714297191
• Email: abdum14@gmail.com

1. Ermiyas G/Egziabher - Blockchain Developer

• Role: Responsible for designing and implementing the smart contracts on the Cardano blockchain, ensuring security and transparency in the microloan transactions.
• LinkedIn: linkedin.com
• GitHub click here

1. Kewser Seid - User Experience Designer

• Role: Creating an intuitive and accessible user interface for the platform, focusing on user engagement and experience.
• LinkedIn: linkedin.com
• GitHub click here

1. Lewan Assefa - Community Engagement and Marketing Specialist

• Role: Engaging with the community to gather feedback and support, and organizing educational sessions about the platform's use and benefits.
• LinkedIn: linkedin.com

Additional Recruitment Plans

If further team members are needed, we will look for individuals with the following skills:

• Backend Developers with experience in Cardano and blockchain development.
• Data Analysts to assess loan performance and user data to optimize the platform.
• Marketing Specialists to promote the platform and educate potential users about microloans.

Engagement with Relevant Members

I have initiated communication with several community members and technical groups through Discord and Telegram, discussing the project scope and gathering initial feedback. This engagement ensures that our proposed team has the necessary support and resources to execute the project effectively.

Transparency and Compliance

We understand the importance of transparency in managing the project and will maintain clear documentation of all communications and engagements. Each team member's role and scope of services will be disclosed in accordance with Catalyst guidelines to ensure accountability throughout the project lifecycle.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Budget Breakdown for Decentralized Microloan Platform on Cardano

Total Budget Requested: ₳70,000

1. Development Costs

• Blockchain Development: ₳40,000
• Smart contract development and integration with Cardano.
• Frontend Development: ₳20,000
• Creating a user-friendly interface for the platform.

2. Design Costs

• UI/UX Design: ₳10,000
• Designing the overall user experience and interface for better engagement.

3. Testing & Quality Assurance

• QA Testing: ₳10,000
• Ensuring the platform is secure, functional, and user-friendly through extensive testing.

4. Community Engagement & Marketing

• Marketing Campaigns: ₳10,000
• Promoting the platform through social media, online ads, and community outreach.
• Community Engagement Events: ₳5,000
• Organizing workshops and webinars to educate potential users about microloans.

5. Legal and Compliance Costs

• Legal Consultation: ₳5,000
• Ensuring compliance with financial regulations and legal frameworks relevant to microloans.

6. Miscellaneous Costs

• Project Management Tools: ₳2,500
• Subscription to project management software to streamline team collaboration.
• Documentation & Reporting: ₳2,500
• Creating detailed reports and documentation for transparency and accountability.

Additional Considerations

• Third-Party Services: Estimated cost for cloud hosting services will depend on usage but should be budgeted around ₳5,000 for the first year.
• Software Licenses: Allocate around ₳2,000 for any necessary tools and software.
• Alternative Funding: If additional costs arise, we plan to seek funding from local community grants, partnerships with financial institutions, and sponsorships from blockchain organizations interested in supporting financial inclusion initiatives.
• Management of Funds: We will maintain strict oversight of the budget, with regular financial reports shared with stakeholders to ensure transparency and responsible use of funds. We understand the importance of adhering to fund rules and guidelines to maintain accountability throughout the project.

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The costs associated with the Decentralized Microloan Platform on Cardano are structured to ensure maximum value for the Cardano ecosystem. Here's how the project's budget represents value for money:

1. Market-Driven Cost Justification: The proposed costs align with the average market rates for software development, design, and legal services in the blockchain industry. For instance, the average hourly rate for blockchain developers ranges from $50 to $150, depending on experience and expertise . Our estimated budget for development and design reflects these industry standards, ensuring we are competitive while also attracting top talent.
2. Focus on Community Impact: The investment of ₳100,000 is not just for software development; it's a direct contribution to enhancing financial inclusion within underserved communities. By providing access to microloans, the platform will empower local entrepreneurs, boost small businesses, and stimulate local economies, which aligns with Cardano’s mission of creating a positive social impact .
3. Sustainability and Growth: The budget allocates funds for marketing and community engagement, which are crucial for the adoption of the platform. By promoting the platform and educating potential users, we are investing in long-term sustainability and growth, ensuring that the initial funding translates into ongoing economic activity within the community .
4. Transparency and Accountability: To uphold transparency, we will provide detailed financial reports to stakeholders and the Cardano community, ensuring that every expenditure is accounted for. This level of scrutiny is vital in demonstrating our commitment to responsible fund management .
5. Leveraging Open Source: By developing the platform as an open-source project, we will encourage community contributions and enhancements, which can reduce future costs and enhance the platform's functionality over time. This collaborative approach exemplifies how investments can yield ongoing benefits for the Cardano ecosystem.

In summary, the funding request for this project is not merely an expenditure; it is an investment in the future of financial accessibility and empowerment within the Cardano community. The costs are justified by the significant impact we anticipate and the sustainable growth model we are implementing.