Project introduction
Name: Savings and Lending Groups
Description: Savings and Lending Groups exist as an informal banking system for many people around the world. These systems are generally used in geographies that may be disconnected physically from traditional banking networks and/or used by populations that do not qualify for traditional bank accounts. These systems are many times referred to as “Village Banking,” “Village Lending and Savings Associations,” or “Community Banking,” among others.
The general format of how these groups function is as follows with variations occurring based on how the group was formed or who supported the group during it’s establishment.
- Every member of the group meets on a regular interval, generally 1x per week.
- Each member saves money during these meetings. The amount of money may have upper and lower bounds of how much money can be saved during each interval.
- Once all members in the group have saved, the money is then lent out to members of the group to be paid back at a specified interval and at a specified interest rate.
- Saving and lending continues by the group until the cycle’s predetermined end has arrived. When this happens, all money must be repaid to the group.
- The group then shares out all the money that has accumulated through savings, lending and repayments proportionally to all the members of the group.
IS - Individual Savings
GS - Group Savings
%IS - proportion of IS to GS.
GT - Group Total - Total amount of cash after all loans repaid
IP - Individual Payout
IS/GS = %IS
%IS*GT = IP
- Once all money is shared out to the group, members elect when to start a new savings and lending cycle, can add members to the group, can make adjustments to the savings and lending mechanisms, and make any necessary changes to their system. The cycle continues.
I am in need of a team that can help create an MVP for these groups. The product would allow for all savings and lending to be tracked and calculations automated for the groups. Groups generally use notebooks and pen to track all data. This would be V1 of the product.
Future versions would tackle the larger problem with these groups; inefficient use of capital.
Problem:
The problem in these savings groups is, at times, there is unlent money in the “bank” This leads to inefficient use of capitol and loss of potential interest.
Solution:
To fix this problem, a blockchain is used for transactions between groups. Groups, who have lent all of their money out internally, can elect for further loans for more efficient use of capital. Rules and qualifications are put in place at the group level and individual level for inter-group lending.
Needs:
- Governance Token
- Stable coin(s)
- Mobile wallet (with savings and lending mechanisms built it)
- NFT(s) to delineate membership to a specific group, with the aim to use Atala Prism DID’s in the future.
- Lending Pools
Paid or voluntary: Unpaid-Cofounder Position(s) - once a team is built, we will actively engage funders (Catalyst, Impact Investors, FinTech investors, NGOs in the FinTech space)
Who am I?
My name is Kyle and I have lived and worked in Zambia for the past 8 years. Most of my time has been spent living and working directly within rural communities as a Peace Corps Volunteer and a business owner. During Peace Corps, I was exposed to this system and worked directly with a savings and lending group from their inception. I helped with their general bookkeeping and calculations. This group was able to go from $1,200 saved and earned in the first 8 month cycle, to $25,000 in their 3rd 8 month cycle. It was amazing to see and involved ZERO external money. Since my time with Peace Corps, I have co-founded a honey company that works with rural communities to distribute long lasting beehives near conservation areas to incentivize forest protection and decrease threats to wildlife. I am still involved with the honey company, but have stepped away from day to day operations for my mental health. The business is still growing and active.
Right now, all I have is idea(s) that I think can make a large impact on the lives of the unbanked and underbanked. I understand how Zambia works from a rural perspective and the potential these underserved communities have regarding use of capital. I am in no shape ready to be a CEO, or find it necessary to be, but I want to build a product that has the potential for real change with a team. If you are interested in learning more and have qualifications necessary to help, please be in touch through a PM.