EthicHub celebrates the first year of its P2P Lending Platform!
The last 12 months have been very exciting for us, exhausting, rewarding, with many challenges and changes in every aspect for our project. We are extremely proud to be able to celebrate the 1st year of the existence of our blockchain-based P2P lending platform, that connects lenders and investors with small farming communities, currently in Mexico. And we know this is just the beginning.
MVP Launch
First of all, lets go back to the 23rd of June last year, when we had the pleasure to present the very first prototype of the platform during the NonCentral Conference in Leon, Spain. With a slight delay of a few days after the official presentation the very first transaction was processed on the platform, for a loan for the community of San Rafael in Chiapas, Mexico.
This very first successfully uploaded and funded loan project was actually quite a large one for a micro-lending platform of over 8000 Euros. Nevertheless, it didn’t take very long, approximately 3 weeks to get it funded by new lenders coming aboard the platform. Since then we have added more than 20 new projects with a total lending value of over 65000 Euros. Some of them have already been repaid as planned by the farmers, achieving a 100% repayment rate so far.
Farming Communities & Local Node
Until today we have granted access to the platform to 3 different farming communities in the state of Chiapas, Mexico and very close to the border of Guatemala. These communities consist of around 60 farmers, who all have been carefully selected by our local node Mario Lopez. Mario has many years of first hand experience in working with coffee farming communities and micro-financing in the agricultural sector. He basically knows very well who is a trustworthy farmer and who is able to repay their loans on time and with the interest rates agreed on beforehand.
The 3 Communities admitted to the lending platform are San Rafael, Las Delicias and La Boquilla. Since coffee is a product with clear seasonal cycles and its farming consists of things such as seeding, harvesting and all the other activities in between like weeding and fertilising, all of these communities request the same type of loans, at roughly the same dates. The funds are mainly employed to hire local workforce, machinery, fertilising products, work tools but also for administrative purposes, in order to improve the farming activities. EthicHub actively helps the farmers by doing so through the local nodes and since we are also a marketplace for commodities we arrange for their product to be bought by larger coffee buying companies.
Going forward we have created a shortlist of new communities being added to the platform, some with similar size but also larger ones of up to 100 farmers. The total potential size of eligible farmers we have identified just for the country of Mexico is a staggering 180,000. Imagine now the potential this has on a global scale.
Lenders
The lenders on the other hand make sure our farmers are provided with the necessary financing to carry out their farming activities. As you may already know EthicHub`s main proposal is to create mutual benefit, where both sides gain, which results in a fairer distribution of wealth. Farmers get easier and cheaper access to financing and investors and lenders can achieve a very competitive annual interest rate of up to 15%. This is possible due to the large difference between what farmers usually pay locally for cash loans (crazy interest rates of up to 120% are not uncommon) and the frustratingly low interest markets where our lenders are based. Via Blockchain and without any intermediaries we bring both sides together and make this economic exchange happen. Our working prototype of the platform can count on already more than 100 active lenders, which is remarkable since hardly any investments have gone into marketing so far. In the mid- to long term it will become a fully fledged, UX optimised Lending Marketplace.
Recently we have visited Eloy, one of our most loyal lenders who is based in Madrid, and asked him a few questions about his experience with EthicHub. Watch the short version of the video here.
Technical Updates
During this year our MVP has undergone some important improvements as well, by introducing feedback received from our lenders and also by what we think is important to make it as easy as possible to be part of the mutual benefit community:
- We have improved to a large extent the UX experience by making it easier to start investing.
- We have added a fiat gateway (for currency like USD or Euros) to the platform so lenders can invest by using their credit card and not only Ethers via their crypto wallets.
- Users can start lending prior to completing the KYC verification process, which is obligatory before cashing out any funds.
- Our main website has changed twice during that time. Going from a not very nice looking basic website to a more informative, UX improved version. We optimised it for mobile, and just recently added a Help Centre that should respond to the frequently asked questions of our users. This section and the main page are going to be continuously improved going forward with more content being added.
- We have integrated the platform from an external site to the website, to make it easier getting started. Our blog that is currently being run on Medium will be fully integrated to the website as well shortly.
The future will see the introduction of a decentralised stable coin like the DAI in order mitigate the fluctuation of the Ether (see structure above).
Awards & Acceleration Programs
We are very happy about the recognition the project received before the MVP launch as well as at the following 2 occasions in the last 12 months after the launch:
- “Design for Development” award as well as a mention in the area of “Service Design” at the Ibero-American Design Biennial (BID18)
- Ship2B, a reference accelerator in impact investment in Spain, gives EthicHub the award for the “Project with the greatest impact” during the Demo Day- XI Edition of their programme.
EthicHub has been accepted en enrolled into 2 acceleration programs, one by aforementioned Ship2B and the other one by Colaborativo Ventures a Mexican Impact + Tech Accelerator. These 2 programs serve to prepare EthicHub for the next stage of development, scalability and expansion into other markets and are focusing on tech startups with the objective to create impact. A new financing round is currently ongoing as well and planned to be completed in the following months. Funds will mainly be employed for technical development, marketing and expansion.
Going forward
We are glad to share more news soon, especially our agreement with a large and known Mexican coffee shop chain for buying the coffee from our farming communities and making sure loans will be paid back successfully.
The platform will soon enter a growth phase, where larger investments in Marketing are being planned with specific campaigns targeting our main potential markets. Part of this will also be a referral campaign that gives active lenders attractive incentives to invite their friends to become users as well.
Specific lending projects for qualified investors and lenders who`d like to invest larger amounts will also be rolled out in the coming months, giving an extra push and allowing larger farming communities to be added to the platform. In case you are interested to become a qualified investor please send us an email and we will be happy to provide you with more information.
