The 2008 financial crises played a huge role in the rise of web 3 technology (i.e., blockchain and crypto). One major cause of this crises was the mismanagement of funds by trusted bankers who over lent money to the high class and delay in repayment resulted in the shortage of cash available for other customers. This caused a ripple effect in the US and global economy leading to the loss of jobs and businesses. Thus, many undeserving people were thrown into sudden poverty due to the mistake of banking professionals which they played no role in. This didn’t seem fair at all, at least not to Satoshi Nakomoto.
In the wake of this event, Nakamoto quickly sprung into action and leveraged blockchain technology – a decentralized public ledger – to create the worlds first cryptocurrency network known as bitcoin. This network initiated global peer to peer currency exchange which has since blossomed into what is now known as web 3.
A key component of this web 3 technology is the blockchain which is basically a decentralized storage, allowing public recording of transactions for reliable record keeping. This decentralized ledger technology was key in Nakamoto’s goal to replace the centralized servers of physical banking institutions with something more public and accountable. Now, a new application has arisen for this accountable public ledger.
Emerging markets in Africa and other continents often suffer from lack of capital for startups to flourish. To tackle this problem, fintech companies began to rise in Nigeria especially, offering affordable loan facilities for small and medium business owners to quickly access from the comfort of their homes. However, this constitutes a risky business for those fintech companies as it is hard to trace these random customers anywhere around the globe should they default on paying their loans. Hence, there certainly has to be a system for vetting these customers before loans are handed to them. Enter, the Creditcoin network!
Creditcoin is a layer 1 network built on the EVM and geared towards providing decentralized credit management infrastructure, targeting emerging markets. Partnering with fintech companies like Aella, Creditcoin acts as a reliable middleman to connect these businesses to companies providing such loans, and handle credit management services for the companies. Basically, Creditcoin determines the credit worthiness of businesses seeking loans from companies, in a trustless manner.
A trustless manager
Incase you’re not yet convinced on the need for trustless management, here’s a quote for you;
“Humans are the biggest weakness of any system!”
This is an actual quote based on real events and not something I just made up. Lots of hacks and leaks recorded in companies have to do with what hackers call “social engineering”. This is when the hacker surveys the facility to be breached, usually physically and identifies vulnerabilities. A key vulnerability is the staff that work in the target facility. Such staff could be deceived into giving out sensitive information like login details to the company computer or such details could be stolen from them.
Returning to the realm of fintech credit management. Traditional fintech companies use people (developers or managers) to track the credit performance of their debtors. Aside the additional cost used in paying this human staff for their work, there remains the possibility of mistake or deliberate malpractice on the side of the staff who determines the credit worthiness of debtors. Hence, this single staff constitutes a great potential point of failure for the entire company. Imagine such a staff bearing a grudge towards the company? Scary right?
This is where Creditcoin steps in. With its trustless blockchain infrastructure, the fintech company can rest easy as far as determining debtors credit worthiness is concerned.
An array of facilities
There are two groups of people served by Creditcoin infrastructure. The first group are fintech companies seeking a reliable vetting of debtors to loan money to and the second group are small and medium businesses seeking loan services. Whether you are a fintech group or a small business, creditcoin has the following array of facilities for you to befit;
- Infrastructure for decentralized satellite-based internet with Spacecoin.
- Financial services for emerging markets with innovative solutions, enabling financial inclusion and RWA opportunities.
- Social impact through on-chain based consumer apps.
- Creditcoin and its partners are the hosts of Cafe GM. At Cafe GM, it is a full 1-2 day pop-up where VIP guests can enjoy limited-run merch drops that are custom designed to the host city, access to the industry’s leaders, fireside chats, complimentary food and beverages, and tons of fun.
A solid team of partners
Creditcoin is a blockchain product connected to other products like Gluwa and Spacecoin. Basically, they are all built and managed by the same group of developers led by the very innovative founder Tae Oh. Together, they constitute a relatively new decentralized infrastructure geared towards providing accessible financial services to emerging markets and empowering businesses to promote prosperity.
Together, they provide critical infrastructure like a satellite based decentralized blockchain platform and blockchain based financial services for anyone, no matter the individual product your’e subscribed to.
Asides these additional products, Creditcoin is also partnering with government institutions like the Central Bank of Nigeria to introduce the eNaira on the platform. They’ve also had talks with the leaders of Liberia, Ghana and Sierra Leone to spread the technology to other countries. This is a project that is very likely to be very successful in the nearest future.
A Verifiable Track Record
There are lots of web 3 projects being introduced in the last couple of years. This craze has driven the explosion of scams on the blockchain. Hence, one may be wondering why Creditcoin should be trusted. If that is your worry, then you have no issues at all.
Creditcoin is the world’s leading real-world asset infrastructure chain for financial institutions, connecting global borrowers, lenders and investors on-chain. To date, the protocol has helped its partners record over 4.27 million real-world credit transactions, valued at $79.7 million USD, while servicing 337,000 customers worldwide across emerging markets.
Creditcoin has partnership with verified government agencies like the central bank of Nigeria. This should give it enough credence because no government is likely to partner with any group that will defraud their people. Also, testimonies abound on the projects website with recipients of the loans showcasing what they have been able to achieve with their loan facilities.
Creditcoin has been around since 2019 and is sure to continue serving people for a long time to come.
A Great Future
Before founding Gluwa and Creditcoin, Tae Oh realized that due to technological constraints, emerging markets were on the cusp of explosive growth — if they only had more reliable access to basic financial infrastructure. Given the massive population of nearly 1.4 billion financially excluded individuals worldwide due to the constraints of existing infrastructure, he seized the opportunity to build a solution for them to secure loans, build credit histories, and achieve economic prosperity.
Picture these scenarios;
-
You are an aspiring tech CEO in a Nigerian university. You sit on your chair marveling at the product you’ve been able to build. You’ve been going at that project for 9 months now. Finally, after weeks of agonizing work and days of mind boggling debugging, you have been able to get your web app to run.
Your product is a logistics website for businesses and customers to request delivery services from logistics companies and individuals. You meet a real need. You know deep in your heart that this company will be very successful. This is a hit!
Now, what is the next step? You need to host your website and pay for advertising. In total, that will cost you about 2 million naira to get up and running. This about $1500 with the current exchange rate. This is a whole lot of money for a student in a Nigerian university. The last money on you had been spent buying data to build your dream company. But now you have the app but no funding.
You look around school for an investor but all other students are in the same predicament as you. Even lecturers cannot release that amount of money to you because the government has not paid them in the past 5 months.
After months of searching for funding you return and lie down dejected and broken. Then you blame yourself, why did you ever trust the big tech CEOs. Imagining you could ever be like them. They all live in America with all the resources they need. You open your laptop, delete your project and continue applying for jobs on LinkedIn.
The big tech CEO dream is not for someone like you from Nigeria.
-
You are a young banker who just graduated from a Nigerian university. Your dad just retired from the civil service and left you his total pension of 9 million naira (about $3000) to start your life. You are no longer his responsibility. You receive the alert with gratitude and vow to make you dad proud.
You don’t want to follow your dad’s path. He spent the last 30 years working for the government and was only able to build a 3 bedroom bungalow with a low cost Toyota sedan. However commendable that is, you want more. You want to be the first billionaire in the family.
Then an idea hits you. You will start a loan service fintech app and invest your money there. Lots of small businesses in Nigeria looking for loans to operate and pay back interest. You don’t have much business experience so you’re not confident of starting your own business. But you can leverage the business experience of others.
A smile carves it’s way up your lips. This is a stroke of genius. You have a hit. Then you put some calls across and gather a team of friends from school to build the application for you. It’s a simple application and after some months of promotion your loan app has gotten over 500,000 downloads. People need loans!
You’re feeling euphoric. Your billionaire dream is taking less than a year to be realized. From your 9 million naira, 2 million went towards building and promoting the app and 6 million has already been loaned out, leaving only a million for operating costs. At this rate of patronage you could triple your capital in just one year. Things are going so well.
Nine months later though only 2 million of your capital has been paid back including interest. Most people just take the money and don’t pay. The 1 million for operating cost is almost exhausted a the 2 million returned may soon be used for operating costs too.
You sit devastated. Nothing prepared you for this eventuality. All the money should have been paid within six months but you haven’t even gotten half the capital you loaned out. People are thieves! Thieves!!
You blame yourself. How could you give out loans without vetting the people collecting them. Loan facilities are not for Nigerians you conclude, dejected
The two scenarios above are not just hypothetical situations but real life possibilities in a poor third world country without much access to funds. Creditcoin is a simple practical solution in these two scenarios. A great future is here for young entrepreneurs in emerging markets.
Conclusion
Following Tae’s conviction, Gluwa successfully launched Creditcoin in 2019, a blockchain network dedicated to creating a secure, yet transparent credit infrastructure for real world financial institutions to publish on and reference. The protocol established a public ledger for recording loan performance, thus facilitating a shared record of publicly verifiable credit histories. By partnering with fintech lenders in local markets, such as Aella in Nigeria, Creditcoin provides a secure and decentralized environment for users to build their credit scores and access liquidity on more favorable terms.
