impactMarket Launches a Microcredit Pilot in Uganda
After a successful pilot in Brazil, users in Uganda are now benefiting from impactMarket’s new service.
impactMarket is thrilled to announce the launch of its microcredit pilot program in Uganda. The pilot aims to offer microcredit to entrepreneurs who are unbanked or underbanked. The participants can have access to credit between $200 to $2500 over a six to a nine-month period at 0.1% per day, using impactMarket’s dApp and the Libera crypto wallet.
Microcredit has become an effective tool for financial inclusion in developing countries, where a large part of the population lives in poverty and has no access to capital. Uganda is no exception, with more than 80% of its population living in rural areas, where access to financial services is limited. Microcredit can play a crucial role in empowering the local population by providing them with the necessary capital to start or grow their small businesses.
This pilot allows the company to better understand the microcredit requirements of users in the country and the region, at large. Additionally, the pilot is testing the feasibility of replicating an established pilot in Brazil with different conditions, such as interest rates and disbursement methods, a different market of entrepreneurs, and a new, customized approach to microcredit. The pilot is also testing the Cash-In/ Cash-Out (CICO) flow within the Libera wallet and providing data to create a fully fleshed Mobile Banker Dashboard.
The pilot involves impactMarket, which besides the project development, management, and assessment, will provide the user interface (Libera wallet and the dApp), mobile bankers (community managers/ ambassadors), and borrowers (microentrepreneurs in Uganda).
The pilot is carried out in three stages which started at the end of April. The milestones of which include identifying entrepreneurs in Uganda, having an application form filled out by participants, selecting the borrowers after an interview with them, setting up a WhatsApp group chat with them and the mobile banker, beginning borrower onboarding and education, and finally, providing funds to the approved microcredit borrowers. The intervention is currently in Stage 2. While the microcredit program is active and in use on the dApp by current borrowers, additional features will be developed to begin Stage 3.
The key data points to track include repayment rates and timeliness, on-chain activity, and financial behavior patterns, such as how many transactions are made before the money is cashed-out to local currency or how many transactions are received through cUSD from customers. We are also exploring off-chain activity, such as what the borrowers are buying, what bookkeeping methods are most common, what businesses are more active and lucrative, and whether location and community are factors in business profitability. Lastly, given the demographic of impactMarket’s target borrowers, quantitative and qualitative measures in social impact: increase in financial literacy, health, purchasing power for women, accessibility of opportunities within households and more will be gauged through surveys, focus groups, and interviews.
Microcredit Onboarding: a delightful kick-off meeting in Kampala!
The pilot kick-off happened on April 16, when our Country Ambassador in Uganda Hannah Bamwerinde and our COO Jessica Gaubert physically met with the borrowers in Kampala. Six of them were identified as the first recipients of this pilot based on their history with impactMarket, their role within their respective communities, and the type of business they applied with. The process started with an introduction to microcredit as part of our financial education component, which was followed by a deep dive into interest and maturity. Once the process and terms were fully understood, a contract was signed between the company and each participant, an important step when it comes to money disbursement through blockchain. Finally, the meet-up finished on a good note with each borrower claiming the loan they were approved from. The excitement was felt within each of them.
The impactMarket microcredit pilot program in Uganda is an exciting step towards achieving financial inclusion for the unbanked and underbanked population. With this pilot, impactMarket aims to empower the local population by providing them with access to much-needed capital and financial services. Soon this new product will be available to all Libera users.
Read more about impactMarket’s microcredit:
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impactMarket (The Human Empowerment Protocol)
impactMarket provides accessible financial solutions to empower underprivileged people all over the world, unlocking opportunities and human potential. Our inclusive protocol is transparent, reliable, and borderless. It operates as a DAO on top of the Celo network, using $PACT as its governance token while running autonomously through smart contracts.
impactLabs (the company)
impactLabs Lda, based in Portugal, was founded in Nov 2020 by Marco Barbosa, Bernardo Vieira, Afonso Barbosa, and eSolidar. The company is focused on building accessible decentralized systems to unleash human potential and disrupt access to finance while driving DeFi adoption.
