👁️‍🗨️Why EthicHub

Blockchain's initial promise was the creation of a new financial system where no one is left excluded, because massive dysfunctions of the traditional financial system have generated huge inequalities (according to the World Bank, a quarter of the world's population lacks access to these services) .

The most severe consequence of this exclusion may be the vast majority of the unbanked being small farmers who, despite having profitable activities, do not have access to formal credit. That is, a fifth of the world's population lives in poverty despite producing a third of the world's food.

There are different causes for their lack of eligibility within the traditional credit system, such as

• Lack of connectivity;

• Irregular ownership of their small lands or geographical difficulty of access;

to name a few.

The unmet financial need of this sector is close to a trillion dollars annually, so it is at the same time a huge problem but also a great opportunity and for this reason, there are many fintech companies interested in serving the unbanked, but their solutions rely on data to develop a risk assessment or on assets that act as collateral for loans.

These solutions are having great success in urban and even rural areas, but unfortunately they continue to exclude the agricultural population, located in more remote regions, without access to the Internet, and their assets (small land) are not eligible as collateral.

This is why EthicHub designed an alternative way to serve these farmers without traditional data or collateral, building an innovative and disruptive Crowd Collateral similar to blended finance, where third parties provide collateral to back the loans.

Loans are made affordable by eliminating the financial intermediation that makes small international transfers so expensive. Implementing audited smart contracts on a public blockchain, efficiency, transparency and traceability is provided.

With a great vision for the future, the Inter-American Development Bank supported this initiative from a very early stage and we can say with great pride that EthicHub was the first project in its portfolio that used cryptocurrencies to solve real problems.

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In 2017, EthicHub was born and pioneered the use of blockchain technology for financial inclusion solutions adapted to small farmers around the world. By providing affordable financing in a sustainable, win-win model, unbanked farmers can free themselves from the cycle of poverty (expensive and insufficient working capital that prevents them from saving to invest in improving their productivity).

In June 2018, EthicHub launched its smart contract-based crowdlending platform, leveraging on the global paradox of different interest rates: millions of small farmers pay absurd interest rates (even above 100% per year) for scarce working capital, while people in other parts of the world barely get a return on their savings in banks.

By connecting complementary economic regions, EthicHub's lending platform generates benefits for lenders and borrowers in a synergistic and mutually beneficial relationship.

After 3 years with real experience in the field and a default rate of less than 2%, the EthicHub team developed its crowd collateral platform to support loans and attract more investors by reducing the perception of risk associated with loans to unbanked farmers.

Money is a tool and EthicHub is proving that ordinary people can use it as a superpower to fix an unbalanced world, reducing inequalities and opportunity gaps. Investing in the productivity of small farmers is not only profitable but also rewarding: it is the one investment that no one will regret.