Introducing: Good Commons Finance
Fighting poverty with universal lending on blockchain
31 July, 2019 — Shanzhai City has taken its development finance technology towards in a new strategic direction to launch Good Commons Finance (GCF), a new lending venture that utilizes blockchain to provide different types of debt finance mechanisms to enable different scales of social development solutions in Southeast Asia. Based in Singapore, GCF is a partnership between Shanzhai City and impact investment firm Design Venture Forward (DVF). The newly-formed company is going to serve Southeast Asia, East Asia, and Central Asia.
Co-Founders Louise Lai and Dr. Tat Lam officially launched GCF with an investor roadshow kicking off at Sofitel Hotel, Singapore, with an intimate evening of presentations on the core business of the company by Dr. Lam, followed by cocktails and private discussions.
GCF is a community-based financial services provider specifically geared towards delivering financial inclusion products to developing markets face daily challenges of poverty and inequality. The company’s mission is to provide ethical and fair-practice financial services to the bottom billion that progressively builds individuals’ economic capacity to overcome barriers to financial access, with products that are risk-mitigated to meet the specific needs of the poor to achieve prosperity.
As part of a global effort towards building economic inclusion, GCF has committed to supporting the United Nations 2030 Sustainable Development Goals, especially goal 1. end poverty in all its forms everywhere and goal 8. promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Although over half the world’s population borrows money, the majority in developing countries still borrow informally, increasing the risk towards unrecoverable financial loss and economic exploitation. According to the Global Findex database, which is the world’s most comprehensive data set on how adults save, borrow, make payments, and manage risk, there are 1.7 billion adults are unbanked — 56% of which are women[1], and 40.3 million people suffer from modern slavery[2].
Seeking to fight against economic disparity and oppression, GCF will deploy easy-to-use digital finance services to mobile devices in developing markets. Theses formal, safe and accessible community-based finance solutions will empower groups of individuals with immutable digital identity that leverages the power of Distributed Ledger Technology (DLT) to secure assets and payments, safeguard digital privacy, and increase financial participation. Our solutions include loans and micro municipal bonds to communities, cooperatives and individuals across the following business units:
- Non-Collateralized Micro-Entrepreneurship Microcredits — in collaboration with Grameen Trust Bangladesh[3] to deploy micro loans with a focus on women borrowers, starting in Hong Kong to service 1.3 million in poverty[4];
- Collateralized Rural Cooperative Loans — agricultural equipment and operations loans for community-based organizations, starting in Laos, Papua New Guinea (Laos coffee plantations to increase productivity and sales);
- Pay-for-Success (P4S) Municipality Loans — community-based municipal bonds for small-scale infrastructural improvements, starting in Yangon, Myanmar.
The core value and innovation is to provide last-mile-first financial services using advancements in decentralized ledger technology. By starting with the last mile first and local partnerships, GCF products and services are able to incrementally capacity-build communities’ financial, digital, and data literacy, enabling the unbanked to improve financial access, credibility, and participation over time.
DLT mechanisms provides benefits for GCF investors by hedging foreign exchange risks, conforming transparent business practices, on-boarding new users faster, and built-in impact metrics, while also providing advantages for borrowers with digital identifications that progressively builds their KYC ratings, digitizes assets onto blockchain, ensures self-sovereign control over privacy data, and enables borrowers to participate in consensus based governance decisions over social, civic, and economic wellness of their community.
GCF brings over 20 years of experience with a solid track record serving development finance solutions for governments, development banks, iNGOs and developing communities globally. The Executive Team includes Louise Lai (Chairman), Dr. Tat Lam (CEO), Weeliang Chia (Managing Director), Howie Chan (Managing Director), Ricky Li (Financial Analyst), and Chen Jing (CTO), along with Sam Say (Cooperative Production Loan Lead) and Gao Zhan (Grameen Lead).
References:
[1] The World Bank, The Global Findex Database 2017; https://globalfindex.worldbank.org/
[2] International Labour Office (ILO) & Walk Free Foundation 2017, Methodology of the global estimates of modern slavery: Forced labour & forced marriage, ILO; https://www.ilo.org/global/topics/forced-labour/%20publications/WCMS_586127/lang--en/index.htm
[3] GCF has formed a formal partnership with Grameen Trust Bangladesh to bring the Grameen microcredits model onto DLT (aka blockchain); https://medium.com/impact-oxygen-foundation/decentralizing-grameen-microcredit-shanzhai-city-to-launch-new-blockchain-driven-microcredit-12e3fe223634
[4] Government of the Hong Kong Special Administrative Region, Office of the Government Economist Financial Secretary’s Office, Hong Kong Poverty Situation Report 2017; https://www.povertyrelief.gov.hk/eng/pdf/Hong_Kong_Poverty_Situation_Report_2017(2018.11.19).pdf
