Last updated 8 months ago
Paraguayans face predatory high-interest loans, limiting financial inclusion and keeping families and individuals trapped in cycles of debt.
A Cardano-based microfinance platform built for an existing Paraguayan cooperative, offering low-interest loans repayable in ADA or stablecoins via mobile wallets with full transparency.
This is the total amount allocated to Scalable Cooperative Microlending dApp.
Please provide your proposal title
Scalable Cooperative Microlending dApp
Enter the amount of funding you are requesting in ADA
70000
Please specify how many months you expect your project to last
4
Please indicate if your proposal has been auto-translated
No
Original Language
en
What is the problem you want to solve?
Paraguayans face predatory high-interest loans, limiting financial inclusion and keeping families and individuals trapped in cycles of debt.
Supporting links
Does your project have any dependencies on other organizations, technical or otherwise?
No
Describe any dependencies or write 'No dependencies'
'No dependencies'
Will your project's outputs be fully open source?
Yes
License and Additional Information
All outputs of this project will be open source under the Apache 2.0 license, including smart contracts, mobile app, cooperative dashboard, and documentation. This ensures transparency, peer review, and community trust. It allows developers, cooperatives, and organizations across Latin America and globally to freely use, adapt, and build upon the solution, fostering collaboration, innovation, and replicability for financial inclusion on Cardano.
Please choose the most relevant theme and tag related to the outcomes of your proposal.
Financial Services
Describe what makes your idea innovative compared to what has been previously funded (whether by you or others).
This project brings innovation by combining Cardano smart contracts with mobile wallets to deliver transparent, low-interest microfinance through existing Paraguayan cooperatives. Unlike traditional high-cost credit, it automates loan issuance, repayment, and auditing on-chain, lowering risks and costs. Its open-source Apache 2.0 framework ensures transparency, security, and replicability, creating a scalable model for financial inclusion across Latin America.
Describe what your prototype or MVP will demonstrate, and where it can be accessed.
The prototype will run on Cardano testnet and include smart contracts for loan issuance, repayment in ADA/stablecoins, and cooperative reporting. A mobile wallet app will let borrowers request and repay loans, while a web dashboard enables cooperative admins to track balances and loan health. All code and documentation will be released on GitHub (Apache 2.0), with APK and demo access for testers, ensuring transparency and usability before mainnet deployment.
Describe realistic measures of success, ideally with on-chain metrics.
Success will be measured by 200–300 borrowers onboarded, 500+ new Cardano wallets created, and hundreds of micro-loans issued and repaid on-chain. Thousands of transactions will generate ADA fees, boosting network activity and utility. Impact will be clear through cooperative adoption and real-world DeFi use in Paraguay, demonstrating Cardano’s role in expanding financial inclusion.
Please describe your proposed solution and how it addresses the problem
This project will build a Cardano-based microfinance dApp to provide low-interest, transparent loans through cooperatives in Paraguay. It leverages smart contracts, mobile wallets, and community trust to replace predatory high-interest credit with affordable, accountable access to finance. The system revolves around a simple, scalable cycle: identity → loan issuance with small fee → repayment & transparency.
How It Works (Core Process):
Identity Verification – Cooperative members are verified using lightweight digital ID tied to their cooperative membership, ensuring accountability and preventing fraud.
Loan Issuance with Small Fee – Borrowers request loans via mobile wallet, disbursed in ADA or stablecoins. Smart contracts set terms, apply a small service fee, and automate interest/repayment schedules.
Repayment & Tracking – Borrowers repay directly in ADA/stablecoins through the wallet. Smart contracts record repayments and update loan status. Cooperative dashboards track loan performance, liquidity pool health, and repayment history.
Technical Components:
Smart Contracts: Manage issuance, repayment, interest, and liquidity pools.
Mobile Wallet Integration: Borrowers view loans, request funds, and repay.
Cooperative Dashboard: Admins monitor activity, generate reports, and manage funds.
Open Source (Apache 2.0): All contracts, code, and documentation will be public for replication and audit.
Why Paraguay?
Citizens face some of the region’s highest credit costs, with exclusion from traditional finance.
Smartphone adoption is high, but banking access remains low.
Cooperatives are deeply trusted institutions, making them the ideal partners for blockchain-based lending.
Benefits to Cardano:
Adoption: Hundreds of new wallets/accounts created via onboarding.
Network Growth: Thousands of on-chain transactions from loans, repayments, and service fees generate ADA utility.
Replicability: Open-source model can be expanded to other cooperatives in Latin America.
Impact: Demonstrates Cardano’s role as the blockchain for real-world DeFi use cases that improve lives.
Please define the positive impact your project will have on the wider Cardano community
This project will have a transformative impact on both Paraguay’s financial landscape and the Cardano ecosystem. By enabling transparent, affordable lending through trusted cooperatives, it addresses one of the biggest barriers to financial inclusion: access to fair credit.
For Paraguayans:
Provides access to low-interest loans compared to predatory traditional credit.
Empowers individuals through digital identity and blockchain-backed accountability, building trust in financial interactions.
Strengthens cooperatives as anchors of local finance, equipping them with modern tools to serve their members better.
Expands economic opportunities by giving borrowers access to capital for everyday needs, education, or business growth.
For Cardano:
Creates hundreds of new wallets/accounts as borrowers and cooperatives onboard to the ecosystem.
Generates thousands of on-chain transactions from loans, repayments, and service fees, increasing ADA utility and transaction volume.
Demonstrates Cardano’s unique position in real-world DeFi, proving it can deliver impactful financial products in emerging markets.
Strengthens Cardano’s social impact narrative, showing the blockchain as a tool for empowerment, not just speculation.
Provides an open-source blueprint (Apache 2.0) for replication by other cooperatives, NGOs, and developers across Latin America and beyond.
Broader Significance:
This solution can scale beyond Paraguay, offering a replicable, community-first model for blockchain microfinance in unbanked regions worldwide. By combining identity verification, micro-loans, and transparent repayment on Cardano, the project showcases how blockchain can directly improve financial inclusion while reinforcing Cardano’s long-term relevance and adoption
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?
Team Capability
Our team combines financial, legal, and governance expertise with direct experience in Paraguay’s cooperative sector. We are well positioned to deliver a trusted, scalable solution that meets both community needs and regulatory standards.
Key Team Members:
Rodrigo Enmanuel González Alonso & Fernando Orue – Senior members of one of Paraguay’s largest cooperatives, bringing extensive experience in liquidity management, financial services, and compliance with national financial regulations.
Yaqueline Escobar – Legal governance and public policy specialist, ensuring regulatory alignment and transparent operations at every stage.
Cooperative Partnership
The partner cooperative will seed large amounts of liquidity into the system, ensuring immediate financial depth for thousands of loans. However, for this liquidity to scale securely, the cooperative requires a dedicated mobile app and dashboard that can handle thousands of users, loan requests, repayments, and compliance checks. This project provides the infrastructure to make that possible.
Processes for Transparent Fund Management
Milestone-Based Fund Release – Funds unlocked after delivery of tangible outcomes: app development, cooperative onboarding, compliance testing, and public deployment.
Quarterly Financial Reporting – Public, detailed financial breakdowns shared with the Cardano community.
Independent Audits – Third-party reviews of fund usage and compliance to ensure accountability.
Validation of Feasibility
Financial Depth – Cooperative liquidity ensures immediate real-world application of the system.
Regulatory Assurance – Legal experts ensure alignment with Paraguayan and international standards.
Scalability Testing – Mobile app and backend will be piloted in a cooperative setting before scaling to thousands of users, validating performance, security, and usability.
Conclusion
With strong cooperative backing, experienced financial leadership, and a legally sound structure, this project is feasible and ready to scale. By combining liquidity, compliance, and mobile-first infrastructure, we can deliver a sustainable, large-scale microfinance solution on Cardano.
Milestone Title
Milestone 1 – Drafting & Schemes
Milestone Outputs
Design and draft the technical architecture of the dApp, including smart contract logic for loan issuance and repayment, identity verification schemes, and cooperative liquidity models. A functional prototype of the mobile app will be developed to simulate loan request and repayment flows, alongside wireframes for the cooperative dashboard. Compliance and security considerations will be included, ensuring the foundation is strong before moving to testnet deployment.
Acceptance Criteria
Completion of technical documentation covering smart contracts, identity workflows, and liquidity structures. At least one working prototype of the smart contract must be deployed on a local development environment simulating a loan/repayment cycle. A mobile app mockup or wireframe showing the request–repay flow should be available. Cooperative compliance and liquidity elements must be embedded into design. Deliverables must be published openly for Cardano community review and feedback.
Evidence of Completion
Proof will include a GitHub repository with initial smart contract code, app prototype wireframes, and technical documents. A public report will summarize design decisions, security considerations, and cooperative liquidity models. Screenshots or demo videos of the prototype app will be provided. All outputs will be shared publicly with the Cardano community, ensuring independent verification of progress before moving to testnet deployment.
Delivery Month
2
Cost
21000
Progress
40 %
Milestone Title
Milestone 2 – Testnet Deployment
Milestone Outputs
A fully working version of the dApp will be deployed on Cardano testnet, seeded with cooperative liquidity. The system will enable users to onboard via identity verification, request loans, and process repayments. Cooperative staff will use the dashboard to manage accounts, loans, and compliance reports. Pilot testing with 20–30 participants will simulate real usage and provide key feedback. Smart contracts will be tested and refined, ensuring stability and security before mainnet launch.
Acceptance Criteria
A functional dApp deployed on Cardano testnet with smart contracts executing issuance and repayment cycles. At least 20–30 test users successfully onboarded with verified identities. Transactions for loan issuance and repayment must be visible on the Cardano testnet explorer. The cooperative dashboard must display accurate loan tracking and compliance reporting. A security review of smart contracts must be completed. User testing feedback must be documented and integrated into refinements.
Evidence of Completion
Evidence will include verifiable testnet transaction links showing loan and repayment flows, GitHub updates with smart contract code, app builds, and dashboards. Screenshots of cooperative dashboard in use, test user reports, and feedback documents will be shared. A milestone report will summarize test results, improvements, and stakeholder feedback. All outputs will be made publicly accessible for the Cardano community to audit and verify.
Delivery Month
3
Cost
21000
Progress
80 %
Milestone Title
Milestone 3 – Mainnet Launch
Milestone Outputs
The final stage delivers the full deployment of the microfinance dApp on Cardano mainnet. The mobile app will be live for cooperative members, enabling loan requests and repayments in ADA or stablecoins. The cooperative dashboard will manage liquidity, compliance, and reporting. Cooperative partners will seed liquidity, and 50–100 live loans will be issued during this milestone, proving system adoption at scale. This milestone validates Cardano’s real-world DeFi utility in Paraguay.
Acceptance Criteria
The dApp is live on Cardano mainnet with at least 50–100 loans successfully issued and tracked on-chain. Borrowers are able to request, receive, and repay loans through the mobile app, with transactions verifiable on the blockchain. Cooperative staff actively use the dashboard for compliance and liquidity management. Evidence of borrower participation and cooperative adoption must be provided. A final impact report must demonstrate system usage and Cardano network metrics such as wallets and transactions.
Evidence of Completion
Completion evidence will include mainnet transaction hashes for loan issuance and repayments, GitHub repositories with final smart contract code and app builds, and cooperative usage reports. Screenshots or demo videos of the mobile app and dashboard in production will be shared. User testimonials and cooperative statements will support adoption evidence. A final close-out report and video will summarize outcomes, impact metrics, and next steps, ensuring full transparency for the Cardano community.
Delivery Month
4
Cost
28000
Progress
100 %
Please provide a cost breakdown of the proposed work and resources
Rationale: Development of Cardano-native smart contracts in Aiken/Plutus for loan issuance, repayment, cooperative liquidity, and identity verification. Includes independent security audit to identify vulnerabilities, verify compliance, and guarantee reliability before mainnet launch. This is the most critical component of the project, as it underpins user funds and system trust.
Rationale: Creation of a mobile-first app and cooperative dashboard. Features include loan application/repayment, wallet integrations (Lace, Eternl, Vespr, hardware wallets), and user-friendly identity onboarding. UI/UX optimization ensures accessibility for first-time crypto users.
Rationale: Development of backend systems to handle loan logic, APIs, cooperative liquidity tracking, and secure user data storage. Includes database and server setup, plus monitoring tools to ensure scalability for thousands of users.
Rationale: Drafting legal policies, KYC/AML integration, and ensuring compliance with Paraguayan cooperative and financial regulations. Covers legal advisors’ role in shaping terms of use, governance structures, and cooperative agreements.
Rationale: Testnet pilot with 20–30 users. Includes cooperative staff training, user incentives for participation, and feedback collection. This phase ensures contracts, app, and backend operate reliably before scaling.
Rationale: Launch on Cardano mainnet with 50–100 loans issued as proof of adoption. Includes onboarding support for cooperative members, compliance monitoring, and user education workshops. Validates scalability for thousands of users.
Rationale: Ongoing coordination of technical and legal teams, communication with the cooperative, and Cardano community updates. Includes final close-out report and video summarizing results, metrics, and lessons learned.
How does the cost of the project represent value for the Cardano ecosystem?
This project represents excellent value for money because it combines direct adoption impact, regulatory compliance, and technical innovation, all while delivering a reusable, open-source microfinance solution for the Cardano ecosystem.
Strategic Adoption in Paraguay
The cooperative partner is ready to seed significant liquidity and onboard thousands of members. This ensures immediate adoption with real-world users, rather than speculative use cases.
The dApp creates a sustainable model of financial inclusion by offering low-interest loans and repayments via ADA or stablecoins, bringing new on-chain utility.
Security & Trust First
A major share of the budget (20,000 ADA) is allocated to smart contract development and third-party audit, ensuring user funds are safe. For a financial dApp, this is both non-negotiable and cost-effective compared to industry standards.
Scalability & Reusability
By open-sourcing the code (Apache 2.0), this project creates a reusable framework for other cooperatives and microfinance institutions in Latin America. The investment thus multiplies across communities, amplifying Cardano’s reach.
Balanced Budgeting
Development costs (front-end, back-end, mobile app, and contracts) are aligned with industry-standard rates for skilled developers in Latin America, avoiding overpricing.
Legal and compliance expenses are lean (9,000 ADA) compared to the cost of securing a compliant lending framework, but sufficient given the team’s direct expertise and connections.
Outreach, project management, and reporting are kept at 6,000 ADA, ensuring transparency and accountability without inflating administrative overhead.
Catalyst Leverage
The cooperative contributes liquidity, significantly reducing the need for Catalyst funding for capital. Catalyst funding is therefore dedicated to infrastructure, compliance, and adoption, maximizing efficiency and impact.
In summary, with 70,000 ADA, the Cardano community gains a secure, audited, regulatory-compliant microfinance platform that drives real ADA usage in a high-need market, seeds long-term adoption, and provides open-source tools for replication across Latin America. The balance between technical build, compliance, and adoption ensures every ADA spent drives measurable impact and growth.
Terms and Conditions:
Yes
Our team combines legal, financial, and technical expertise to deliver a secure, scalable, and regulation-compliant microfinance dApp for Paraguay. The blend of governance knowledge, cooperative partnerships, and blockchain development experience positions us uniquely to execute this project effectively.
Team Credentials: https://drive.google.com/drive/folders/17PaT4iuro8SyORfhMxQXWBYwOfVvcRjl?usp=drive_link
Rodrigo Enmanuel González Alonso – Project Lead & Legal Advisor
Responsibilities: Lead the overall project, ensuring full alignment with Paraguayan financial regulations and compliance frameworks. Coordinate with government bodies, cooperative partners, and the technical team. Oversee the legal validity of lending practices and ensure user protections.
Fernando Orue – Legal Advisor & Compliance Expert
Responsibilities: Support in drafting and implementing the legal and compliance structure of the platform. Oversee KYC/AML integration and ensure full adherence to national financial standards. Provide ongoing monitoring for regulatory updates.
Yaqueline Escobar – Legal Advisor & Public Relations Lead
Responsibilities: Manage public outreach, educational efforts, and media communications to build trust in the platform. Support drafting of user agreements and ensure compliance with data privacy standards. Bridge communication between cooperative stakeholders and end users.
Technical Team (to be hired):
We will recruit a dedicated full-stack developer team with the following key skills:
Front-End Developer (UI/UX): Build user-friendly mobile and web interfaces optimized for fast onboarding and loan/repayment flows.
Back-End Developer: Manage server logic, databases, and API connections to ensure reliable and scalable performance.
Smart Contract Engineer (Aiken): Develop secure Cardano-native smart contracts for loan issuance, repayments, identity verification, and cooperative liquidity integration. We already have a candidate identified for this role.
Engagement & Readiness:
We have already initiated discussions with qualified candidates in the Cardano developer ecosystem, ensuring no delays in onboarding. The legal team is fully engaged and in close contact with cooperative stakeholders, ensuring seamless collaboration. The technical hires will ensure robust delivery, while legal and compliance oversight guarantees adoption at scale.