Blockchain, an allied tool of financial inclusion
The crowdlending platform Ethic Hub facilitates contact between small investors and Latin American farmers wanting to expand their businesses.
What can farmers who live in developing areas and want their businesses to prosper do? The answer is Ethic Hub, a Spanish crowdlending platform born in 2017 that uses the blockchain to establish contact between these people and small investors. The project guarantees a return of up to 15% for individuals and facilitates an exit route for Latin American farmers.
“Those people who lack access to banking credit lines have a serious problem. The loans they apply for to finance their harvests are in cash with high interest”, explains Íñigo Montero, an advisor of Ethic Hub and an expert in Blockchain. “The platform lets anyone lend 2, 200 or 2,000 euros. We offer them a financing tool at an accessible and cheaper interest rate”.
The competitive strategy of Ethic Hub is based on blockchain, which has created the appearance of cryptocoins. “In the current system, it is impossible to make an international transfer of 10 dollars because it takes a lot of time. With Blockchain, it can send 20 cents to any place in the world without commissions, in a few minutes”, Molero said.
In order to increase the visibility, the platform periodically launches campaigns. For example, those related to the coffee harvest, where the money collected is aimed at manpower, accommodation of employees, or basic tools. Or those related to harvest areas. In the last campaign, 8,000 euros were collected to eradicate weeds.
Right now, the project focuses on Mexico and it has aided dozens of initiatives, returning the agreed interest to the investors. “For us, it was important to prototype the model. Create a platform, contact the communities, locate farmers without banking access, pass them the money, and above all, have them pay it back at the stipulated interest. And it has already happened”, he said.
The process is as follows: “a farmer uploads a project, applies for an amount and the different users lend him/her the amount stipulated. That’s the moment when the farmer gets the microcredit without the action of any broker, as Ethic Hub only offers the platform. The money doesn’t pass by us as we are not financial brokers. This way, they save costs as we eliminate brokers who offer nothing to the value chain”.
Once the project is settled in a specific zone, Iñigo Molero wants the platform to reach any corner of the world. “We have a global vocation because these farmers are around all the world”, he states. His goal is to show that the blockchain, used for social purposes, offers opportunities for modest workers and small investors to prosper.