Interview with Founder of Sentinel Chain: Benefiting the Unbanked Farmers through Blockchain
Earlier this month, BlockArk reached out to Sentinel Chain Founder and CEO Roy Lai for a short interview to help the community gain a better understanding of the project.
The original interview was conducted in Mandarin. Here’s the English version of the interview transcript.
Captain: Hi, Roy, thank you very much for taking this interview. According to Sentinel Chain’s official website, InfoCorp is your strategic partner, where you serve as CEO. Can you tell us more about InfoCorp?
Roy: InfoCorp is a payment service provider operating on an instant money transfer system. Back then, we found that many people in developing countries were unbanked and they preferred using cash for payment, making it very difficult to introduce a payment system in these countries. Therefore, we chose to provide loan services instead. But loan business is faced with many challenges in Asia as well. The loan rates in many places are very high, reaching over 30%. As loan services feature high uncertainty, we must first of all address the issue of provenance to make our loan services work. To accept livestock as a collateral for loans, InfoCorp provides a private blockchain supported by tags with livestock provenance and a mobile app to solve the issue of provenance for our loan services. We have worked with insurance and loan providers to establish a private blockchain network, which represents the first step of our work.
Captain: What roles are Sentinel Chain and CrossPay playing in this regard?
Roy: CrossPay uses a B2C model. The network of Sentinel Chain can be connected to our CrossPay networks in different countries. So Sentinel Chain actually serves as a B2B network. Every country has a CrossPay network. The main purpose of Sentinel Chain is to build a bridge between borrowing and lending countries. For instance, countries with low interest rates like Japan can lend money to countries with high interest rates through Sentinel Chain.
Captain: In other words, InfoCorp and CrossPay can facilitate the lending process by addressing issues such as livestock provenance and verification of livestock ownership. Then money can be safely transferred from countries with low interest rates to countries with high interest rates, which helps to ease financing burdens and promote global flows of financial assets. In which countries has Sentinel Chain established a presence?
Roy: The first country is Bangladesh and we will enter a larger country in the coming future. We will set up branches to take charge of local operations and provide technical support. We will also work with local loan and insurance providers. We initially targeted Asian countries. But after issuing tokens on a global scale and talking with our supporters, we found that many countries in the rest of the world also had the same needs. They include European countries such as Romania, as well as Argentina where we have a subsidiary. We have also held roadshows in Europe to share the development of inclusive finance in Asia, paving way for the globalization of our business.
Captain: Can you tell us about your operations in Bangladesh?
Roy: Currently, we are making plans for detailed implementation, as we are not challenged by technical problems, but by how to cooperate with local loan and insurance providers. With partnerships in place, we are now discussing with them about how to work with each other. The whole process has been delayed for three months due to Sentinel Chain project crowdfunding phase.
Captain: The concept of livestock capitalization is quite novel. How did you come up with it?
Roy: At first, we spent a lot of time studying how to truly solve the problems faced by farmers who were mostly unbanked. For over half of them, livestock is their only asset. An economist in South America once said, unbanked farmers were actually not poor because their livestock could be capitalized.
Captain: What is the biggest obstacle or challenge to turning the concept into reality?
Roy: Livestock insurance is needed in many countries. But the problem of insurance fraud cannot be solved with existing technologies. When entering the livestock insurance market, the first step is to find insurance providers who are willing to cooperate. And they need to address the issue of identity verification. The second step is to prove the ownership of assets. Most farmers have cattle which can be viewed as tangible assets. But proving the ownership of cattle is very difficult. So we have combined verification of farmers’ identity, livestock insurance and livestock provenance to gain a complete set of information, which is more valuable than livestock.
With such information in hand, we can start to evaluate the accepted value of loans. Credibility is not a problem as a borrower will pay back loans to avoid disapprovals from his community. The real problem is that the value of his assets cannot be accurately evaluated even by loan providers, which makes it difficult to decide whether to borrow him 500 or 1,000 US dollars. If a loan provider has a million customers, each of whom has a cow valued at 1,000 US dollars, the total asset value of the customers reaches 1 billion US dollars. This is a very large number and more business models can be involved in the long term.
Captain: According to your roadmap, the first version of CrossPay will not be launched until 2019. What is your main work before the app goes live? Is there any problem?
Roy: We will focus on testing and implementation during that period. We may provide pure loan or insurance services before 2019. And loans combined with insurance services and livestock provenance will not be available until 2019.
Captain: Besides using livestock as collateral for loans, in which scenarios can we use some of the technologies in your current project in the future?
Roy: There are many application scenarios. We have been partnering with VeChain since VeChain pioneered livestock provenance. They have a public blockchain where livestock data can be stored. We can store some public information on the blockchain such as livestock’s age, gender, origin, and value. This can help deal with cross-border livestock transactions. Take beef import and export for example. We can find out where beef or a cattle disease comes from by using the information stored on the blockchain. But VeChain only allows public information to be stored on the blockchain. Personal information such as a farmer’s ownership of livestock, identity, and insurance records can be stored on a private blockchain of Sentinel Chain. This information can only be obtained with the approval of its owner. Therefore, Sentinel Chain and VeChain can be complementary in the future.
Captain: What about your other partners?
Roy: VeChain is a company focused on distributed capital investment, which is also one of our investment tools. As Sentinel Chain and VeChain respectively provide financial and livestock provenance services, their advantages can be combined through cooperation, creating a win-win situation.
Medishares (MDS) also plays a key role in our partner network. Sentinel Chain has two kinds of customers, namely, the unbanked and foreign financial companies providing financial services. Besides loans, life insurance is also a big problem. But the unbanked have no money to buy life insurance. Therefore, when the issue of livestock provenance is addressed, the problem of life insurance is also solved. Our cooperation with MDS is of strategic significance as MDS has 10 million users and more users means lower premiums. We can launch such cooperation first in China and then in other countries, where our cooperation with MDS in life insurance will bring good results.
End of interview
Sentinel Chain is a blockchain-based international marketplace for cross-border financial services and the world’s first platform to accept the use of livestock as collateral. Taking a unique approach to the last mile problem of financial inclusion, the Sentinel Chain model establishes livestock provenance through the creation of livestock insurance on blockchain — the registration of livestock provenance on blockchain provides the unbanked with a new opportunity: the real possibility of accepting livestock as ‘collateral’ for loans.
To learn more about Sentinel Chain:
Website: https://sentinel-chain.org
Medium: https://medium.com/sentinelchain
Twitter: https://twitter.com/sentinelchain
Reddit: https://www.reddit.com/r/SentinelChain/
Telegram: https://t.me/sentinelchain
Announcements: https://t.me/sentinel_ANN
