Limited access to credit and other financial services has long been a big issue in emerging countries, preventing people from reaching a better quality of life. While financial access is considered a basic necessity in rich countries, it is still unavailable to many people in underserved nations.
Banks often refuse to provide loans due to high credit risk and even if they do this, rates are generally unreasonably high. Moreover, they can significantly vary in different parts of the world. For citizens of Brazil, Mexico, or Indonesia, they are hovering at 6.5%, while in Switzerland or Japan, for instance, the interest rate is negative. All these barriers oblige people who seek funding, whether it’s for studying purposes or for launching a new project, to find other alternatives.
Thanks to a new project, called Swapy Network, individuals in developing countries will be able to easily obtain loans at lower rates via a decentralized blockchain-based platform. The team aims to build a future enabled by a world of efficient credit markets, without any barriers to access the network for new players, where consumers have the power and leverage the benefits of universal access to credit.
The Swapy Network is a decentralized protocol that aims to provide a secure environment to connect all the parties within the financial industry: borrowers, creditors, insurers, data producers, and others. The goal is to provide inclusion at all levels, where companies can offer services within the same environment. The system is powered by an ERC20 Token, the SWAPY, that can be used to pay operation fees and give holders the right to access the network as well as reap its numerous benefits.
The platform combines three main apps: The Swapy Exchange, a tool to connect smart money to emerging economies, The Swapy Financial ID, a tool to provide people with a financial identity, and The Swapy Data Market, a resource to make value out of users’ financial data.
According to Ed Rodrigues, the founder of the Swapy Network, credit is a “wonderful tool to unleash peoples’ potential. Be it to further one’s education, start a business, finance health care or a home improvement; credit is critical for people at the bottom of the pyramid to have a better life.”
As a native Brazilian, Rodrigues better than anyone understands the need to increase financial inclusiveness in emerging markets. The idea to start this project comes from his own experience, when he couldn’t receive a loan to continue his studies in the United States after getting an undergraduate degree in Brazil. “Ultimately, I couldn’t accomplish my dream because of the lack of access to credit,” said the startup’s CEO. It was at that moment when he decided to do something to help other people, like him, to get credits and loans.
However, he still managed to become part of Draper University, one of the top entrepreneurship programs founded by venture capitalist Tim Draper, and after completing it he received the funding to make his dream of universal credit access come true. Draper has eventually become one of the investors in the project.
The development of the Swapy Network is also in line with the UN strategy of promoting inclusive and sustainable economic growth, as it is expected to reduce poverty and facilitate job creation.
The startup is now planning to start a crowdsale to raise $30 million in Ether for further development of the project. There is a limited amount of 100,000,000 tokens, while the hard cap is set at $30 million. The pre-sale will run from March 19 till April 19, 2018, followed by the main ICO from April 26 to May 26, 2018.