MIT Solve

Solution overview

Our Solution

Grow.cx

Tagline

Alternative Credit Scores & P2P Lending Platform for Entrepreneurs

Pitch us on your solution

Small and medium enterprises (SMEs) are the backbone of the Bangladesh economy: they make up more than 90 percent of all businesses that provide two out of three private sector jobs in the country. Digital commerce also boosted numbers of Facebook based entrepreneurs who are doing business from their home.

Entrepreneurs in Bangladesh face hurdles in getting access to finance as financial institutions are reluctant to lend them. This is because of lack of financial footprints of the entrepreneurs.

This digital platform Grow.cx is an innovative platform that provides alternative credit scoring by using AI and P2P lending facilities using Blockchain technology. This project will help in urban and rural areas to get access to an easier way of getting loans.

What is the problem you are solving?

There are more than 4 million SMEs or facebook businesses in Bangladesh. The challenging situation of entrepreneurship in Bangladesh is due to the complexities in the social environment and administrative structure. Many social and operational constraints continue to restrict young people from starting and running economic enterprises. Acquiring funds through traditional sources such as bank loans also have various problems. Most rural youth have lower access to banks. They use personal or household savings, or borrow from friends, relatives, or even money lenders at high interest rates. Urban banks don't assist most youth due to a lack of references. Banks require guarantees and good credit scoring before approving any loans.

Banks/financial institutions reject majority of the loan requests due to less credit score. Specially, young digital entrepreneurs face problem to show any physical assets that will help them to get a loan to fulfil big orders.

Who are you serving?

Our main goal is to create an opportunity for young entrepreneurs by giving them a financial footprint.

The system will provide them a credit score and also a platform to lend small amount of fund to grow their businesses.

By using this digital platform young entrepreneurs can increase their credit score and if the system is plugged-in with any bank then it will be great for them because by increasing credit score, their creditworthiness will be increased thus increasing opportunity to be able to have large loans.

There is a simple process and to guide them through a systematic way, there will be agents who help them with registration, getting loan, preparing papers. This system helps young people to work more effectively and increase the opportunity to get loan for the growth of their businesses. This P2P model will allow small loans such as minimum BDT 5,000 to BDT 5,00,000 which depends on the capital of the lenders.

What is your solution?

The program is designed into 8 steps which replicates the whole process of the system.

Step 1: Lender will register and create a profile. By creating their profile, lender will share his/her portfolio, amount of investments, investment type and criteria. The profile is submitted to the digital platform where lenders and borrowers could find each other.

Step 2: Lender will wait for the loan requests as soon as he/she is successfully registered.

Step 3: Agent will take a video where borrower will explain her need, give an overview of her small business and amount of loan.

Step 4: Agent will help the borrower to register providing share their legal documents as asset/collateral (if any) such as their Trade License of business or property’s papers. Borrower will connect their business Facebook account or ecommerce portal account (if any) with the system to analyze and generate a credit scoring. Agent will also upload the video to the profile which has been created.

Step 5: Borrower will send loan request.

Step 6: Lender will evaluate borrowers profile and their creditworthiness. And also the video to choose a suitable person to lend loans.

Step 7: Smart contract fixes the rate of interest, repayment policies and duration and all other necessary information. If the lender approves the loan request, the smart contract decides the fixed rate of interest for different types of borrowers by checking their creditworthiness. The borrowers can be categorized as high-risk, medium-risk or low-risk borrowers based on their repayment rates.

Step 8: By using blockchain technology and smart contracts auto-payment will be done.

Borrowers can make the payments to the bank account number of the lender give in the smart contracts. If a borrower does not pay installments timely, the smart contract adds late fees to the actual amount. So, if a borrower abides by the terms of the loan, the smart contract would automatically deduct penalties. If the borrower tries to do some unethical act by not paying the loan back, the borrower will be blacklisted in the system. There will be more ways to lessen faulty loans in the system.

P2P lenders using blockchain can help reduce delays, make quick approvals, eliminate the need for meeting the lender face-to-face. MSMEs will be judged on their creditworthiness. Some banks and financial institutions will also be partnered up to test and use the credit scoring system for providing loans.

Select only the most relevant.

Increase opportunities for people - especially those traditionally left behind – to access digital and 21st century skills, meet employer demands, and access the jobs of today and tomorrow
Support underserved people in fostering entrepreneurship and creating new technologies, businesses, and jobs

Where our solution team is headquartered or located:

Dhaka, Bangladesh

In which sector would you categorize your solution?

Finance