Impact lending for the unbanked

[GENERAL] Summarize your solution to the problem.

A P2P lending platform with low interest rates for the unbanked, powered by Impact Score instead of credit history.

[GENERAL] Summarize your relevant experience.

Socious is a fast-growing impact community with 1,000 MAU, supported by 500Global and Microsoft. The team has extensive experience in the impact sector and is comprised of experts in impact measurement, finance, data science, and blockchain development.

[IMPACT] Please describe your proposed solution.

1.7 billion adults are unbanked. For the unbanked, most financial services are not accessible except for services provided by microfinance institutions (MFIs). However, the average interest rate globally is 35% for microlending, which is much higher than the global average for bank credit (10.31%). MFIs’ high interest rates prevent many unbanked from accessing financial services essential to break the cycle of poverty.

In order to solve this problem, we propose impact lending. Socious’ Impact Lending is a decentralized finance (DeFi) protocol that allows people to lend and borrow THANKs (Socious’ native tokens) without having to go through a centralized intermediary. Lending users earn interest and borrowing users pay it. Rather than relying on collateral or credit history, smart contracts calculate individual risk based on users Impact Score, interest rates will be allocated on the basis of this. The interest rates will be significantly lower than those offered by MFIs. By removing the middlemen, this peer-to-peer system offers not only greater value and efficiency in the lending process but also provides the unbanked population with access to capital without any assets or credit.  

Using the guarantor system, users can leverage the trust of other people to borrow THANKs without having a high Impact Score. This system also allows users to improve their impact score by being a guarantor and earn a percentage of the interest repayment. On the other hand, the guarantors’ impact score will decrease if the borrower fails to repay their debt. This balanced approach will increase access to financial services for the unbanked.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The proposed solution addresses the challenge in the following ways:

The overall question to be addressed by the challenge is “What dapps, products and integrations can be implemented to bring impactful use cases to Cardano ecosystem that help drive more adoption?”

Socious is a decentralized application (dapp) and its unique Impact Lending will significantly increase the utility & adoption of Cardano. Users will be using Socious on Cardano to borrow money to start a new business or buy new equipment in order to break the cycle of poverty. Users can lend money to help the unbanked while receiving interest payments.  

Types of proposals include “Marketplaces”, “Social Media”, “Environment” and DeFi. 

Socious is squarely in these areas. Socious’ Impact Lending is a DeFi platform and a “marketplace of microlenders/borrowers”. Socious is also a “Social Media for Social Good” where socially conscious individuals can share content and connect with like-minded people. 

The project is highly relevant to the key metrics for the challenge:

• Increasing the number of dapps and products available for the community to use that help to enrich the ecosystem with new use cases: If the project is successful, it will lead to many more use-cases of the Impact Lending Platform. 
• Increase the number of integrations that bring existing solutions together for a more seamless and connected experience between different products: We bring Cardano, Atala PRISM, Milkomeda, Proofspace, and ERC-20 compatible wallets together to provide a more seamless and connected experience between different products.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Possible challenges or risks to delivering this project successfully include:

Risk: Implementation of smart contracts to an existing mobile app rather than a web app. 

Strategy to mitigate: We will mitigate this challenge by learning and getting support from Cardano/Gimbalabs community

Risk: Accessibility and Usability because we target users who are unbanked. 

Strategy to mitigate: We chose the mobile-first approach so that users without computers can access the product as long as they have a mobile phone. We will conduct user interviews with the unbanked to ensure accessibility/usability. 

Risk: Time allocation; we may face challenges in allocating sufficient time to deliver this project in time. 

Strategy to mitigate: We have been carefully planning resource allocation among different projects. In addition to careful planning, we can mitigate the risk by leveraging our freelance resources; we’ve worked with 20 freelancers in the past who can contribute to the project if necessary.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

We expect that the proposed project can be brought to market within three months of approval of funding – no later than the end of 2022. We will be monitoring the results of the project for three months after the launch. We will submit the final report in the sixth month.

Target Milestones & Deliverables

September 2022

• Project approved by Catalyst voters
• Technical and market analysis of the project
• Finalize workflow
• Ideate and Create Prototypes for User Research
• Conduct User Research using the Prototypes
• Compile and Analyse the findings
• Finalize the UI/UX Design/Technical Architecture 

October 2022

• Start Running Development Sprints
• Unit Testing 
• Integration Testing 
• System Testing

November 2022

• User Acceptance Testing 
• Final Adjustments
• Deployment
• Marketing

December 2022 - February 2023

• Monitor KPIs
• Prepare technical documentation
• Deliver the final report 

Technical Aspects (architecture, language, technologies):

Blockchain: Cardano/Milkomeda

Smart Contracts: Solidity/EVM

Frontend Mobile App: Typescript React Native

Frontend Web App: Typescript NextJS

Backend: PHP Laravel/Typescript Node.js

Database: MySQL

DevOps: AWS

Machine Learning: Azure

Agile tools: GitHub/Trello

Design Tools: Figma/Miro/Canva

[FEASIBILITY] Please provide a detailed budget breakdown.

The budget is segmented according to the identifiable items below at a ratio of $100/hr.

[FEASIBILITY] Please provide details of the people who will work on the project.

Socious is an impact gig marketplace powered by blockchain and AI. We are building an ecosystem to help socially conscious individuals contribute to social/environmental impact by visualizing and rewarding their efforts.

The Socious Team working on this project:

Founder and CEO:

Name: Seira Yun

Location: Tokyo, Japan

Linkedin: https://www.linkedin.com/in/seirayun/

Position: Founder & CEO

Bio: Seira Yun is a serial social entrepreneur and an impact angel investor. He has worked in the impact sector since 2008 in the Middle East, Africa and Asia leading teams within the ICRC, UNHCR, and social ventures. He founded Discover Deep Japan Inc. in 2019, a social venture that focused on diversity and inclusion, which was acquired in 2021. Seira is a full-stack developer and holds a Master in Social Innovation degree from the University of Cambridge. His lived experience as both a migrant and a pansexual queer drives Seira’s passion for social change. Atala PRISM Pioneer Program participant

Name: Jayson Ilagan

Location: Manila, Philippines 

Linkedin: https://www.linkedin.com/in/jayson-ilagan/

Position: Senior Developer

Bio: 

Jayson is a web and mobile app developer with over 12 years of experience. He earned his degree in Computer Science from the Lyceum of the Philippines-Laguna. He accepted his school invitation to work for them after graduation to build systems and worked on developing a faculty performance evaluation system.

After spending six years working at Ivoclar Vivadent Inc. as an IT Global Software Developer, where his primary focus was project creation, he decided to move to Singapore for two years to join Direct Asia Management Services Pte. Ltd. As a web developer, he enhanced the Quote and Buy journey of the company portal that caters to motorcycles and travel insurance. He hopes to build an application for kids with curable diseases who don't have the means to pay for medications to help them access proper medical treatment. Atala PRISM Pioneer Program participant.

Name: Cristhian Tejada

Location, San Salvador, El Salvador

LinkedIn: https://www.linkedin.com/in/cristhian-tejada-a73844174/

Position: Blockchain Developer - freelancer

Bio: A blockchain developer/data scientist with 9 years of experience. Cristhian strongly believes that artificial intelligence and blockchain will play an essential role in sustainable development and social good in the coming years. He currently stands out as a data scientist and blockchain developer in several social impact projects using the technology as a main tool. He also works in the Open Bank Project developing blockchain-based solutions for the financial and banking sector. He has studied business and economics but the need to create tools that improve living conditions and solve environmental problems has driven me to develop skills in computer science. 

In the next few years, he plans to continue his doctoral studies investigating new economic models using Web3 technologies. Atala PRISM Pioneer Program participant.

Name: Raphael Hode

Location: Tokyo, Japan

LinkedIn: https://www.linkedin.com/in/raphaelhode/

Position: Design Advisor - freelancer

Bio: Raphael is a Strategic Designer with a passion for social innovation and sustainability. After a few years in advertising agencies in Paris, Raphael moved to Tokyo in 2015 and joined Designit, a global strategic design firm. At Designit Raphael worked on growing a team and helping some of Japan’s most ambitious companies make innovation happen, leading him to endorse a variety of roles across UX design, service design, business design, and strategy.

In parallel, he has been passionately engaging in activities related to sustainability and social innovation: giving talks and workshops, mentoring early-stage social founders, and eventually co-founding a social venture. Today, he spends most of his time working with incredible social entrepreneurs to help them define, design, and launch visionary products that contribute to creating a more sustainable society.

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Socious is planning to become a decentralized autonomous organization (DAO) by 2026. In order to achieve this goal, we need to build an ecosystem that people love to be a part of in the long term. We will return to Catalyst to build necessary features that allow the core Socious team to gradually step out of the decision-making process and achieve a truly decentralized and fully autonomous organization. 

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

This project has five clear deliverables that will act as proofs of completion:

• The code of the Impact Lending smart contracts deployed and available on GitHub - open source 
• The code of the Impact Score incorporating Impact Lending transactions deployed and available on GitHub - open source
• A video of the full demo
• App statistics available to the community
• Verified business model for future scalability (verified when the KPIs below are achieved) 

Our key metrics/ KPIs until December 2023 for this project will be:

a) the number of users who received loans: 1,000  

b) the amount of loans received: USD 300,000

C) new Caradno wallets: 1,000

In addition, we will measure project progression against the Milestones & Deliverables plan above. Our progress will be reported in the monthly reporting for Catalyst and in the final project report. We may also present at Townhall and other community meetings on an ad hoc basis.

Furthermore, the team adopts Agile methodology based on the tools provided by Trello and GitHub. Besides the monthly progress reports, the progress will be tracked by Trello Kanban Board, Github issues, and commits. Intermediate progress will be reported as Sprint Burndown, a KPI metric that shows the progress in the percentage of each development sprint.

[AUDITABILITY] What does success for this project look like?

The success of the project would involve:

• The Impact Lending smart contracts are deployed to production and fully operational.
• The unbanked can lend/borrow on Socious.
• Lenders can improve their impact score by lending money on Socious.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

Entirely new proposal.

Sustainable Development Goals (SDG) Rating

Impact lending tackles at least eight of the seventeen goals. These include SDG1, on eradicating poverty; SDG 2 on ending hunger, achieving food security and promoting sustainable agriculture; SDG 3 on profiting health and well-being; SDG 5 on achieving gender equality and economic empowerment of women; SDG 8 on promoting economic growth and jobs; SDG 9 on supporting industry, innovation, and infrastructure; and SDG 10 on reducing inequality. In particular, This projects contributes to Indicator 1.2 - “By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions”. 

In addition, Socious brings more financial and human resources to impact organizations to accelerate social and environmental impact. While SDGs’ Indicator 17.17.1 “Amount of United States dollars committed to public-private and civil society partnerships” may be close to what we use, we specifically use the following indicators:  a) the amount of money donated to impact organizations; b) the number of impact organizations that received donations; c) the number of organizations that received time/skills contributions; d) the number of hours that were contributed to impact organizations; e) the number of people who contributed their time/skills to impact organizations

Socious also seeks to create a virtuous circle of giving, giving back, and pay forward through THANK tokens. While it is difficult to measure the impact of showing gratitude, we believe it brings joy and happiness to both the giver and the recipient. The indicators we follow include a) the number of times users thanked other users for their acts of kindness and b) the amount of THANK transferred as a sign of gratitude.   

Our long-term vision is to build an impact ecosystem that can transform the world. If we successfully implement our project, more people will contribute their time and money to social causes, which will accelerate social and environmental impact.