Green Finance 3.0 with Aloi

Aloi

Green Finance 3.0 with Aloi

Cashless green inclusive finance: increase the investability of informal sector businesses through monitoring loan usage, repayments, and income

Kathmandu

NPL

For-profit, including B-Corp or similar models

Informal sector micro-entrepreneurs often lack trusted credit histories, proof of earnings, and collateral, preventing access to affordable financing. For interested lenders, high monitoring costs and risks make informal sector loans unfeasible. There is tremendous opportunity in the US$4 billion annual credit gap to support the green transition of 90 million informal sector entrepreneurs globally. Unfortunately, without appropriate monitoring mechanisms, climate finance is not reaching the last-mile entrepreneurs who need it most. In Nepal, 99.7% of businesses are in the informal sector. Micro, small, and medium enterprises (MSMEs) are a critical engine of economic growth, contributing to 22% of GDP and employing 31% of the working population. Despite their importance, women own only 13% of MSMEs. In addition, 13% of Nepal’s population lives below the poverty line ($1.90/day). Aloi's mission is to increase entrepreneurs' incomes, enabling them to achieve middle-class resilience (+$3/day).

Aloi’s vision is to increase green inclusive finance by unleashing the investability of informal sector entrepreneurs using data. Our cashless financing platform provides real-time monitoring of fund usage, including loans, grants, and incentives such as carbon credits. By creating custom closed-loop tokenized ecosystems, we reduce risk and manual monitoring costs. Aloi’s platform works on any phone via SMS, ensuring inclusivity for all users, including those without smartphones. To increase trust to invest, our software-as-a-service digitally monitors the entire financing cycle: usage, repayments, and income. Funds are restricted to an ecosystem of accredited vendors, ensuring they are used as intended. Our technology-inclusive solution enhances targeted green financing, fund transparency, and credit data collection. Our model includes loan facilitation and software licensing. Currently, we work in 2 sectors: electric vehicles providing public transportation and agri-producers. Aloi has operated in Nepal for 6 years, building a strong network of collaborators and clients. Key milestones include contracts with 28 financial service providers, including 7 commercial banks (e.g., Standard Chartered Bank). Our north star is becoming a leading mechanism for grassroots investments in emerging markets. Demo video: https://youtu.be/3pBB0d4EUhA

Aloi serves informal micro-entrepreneurs in Nepal who fall into the “missing middle”, requiring more investment than microfinance institutions offer but excluded from commercial lending. For commercial banks, high monitoring costs render loans below US$10,000 unfeasible, while microfinance institutions require significant collateral for loans exceeding $3,000. Our solution targets grassroots entrepreneurs in climate-sensitive sectors such as agriculture and electric public transport, where financing gaps are a bottleneck to increase livelihoods and climate resilience. For example, we work in the smallholder dairy sector. In Nepal, 95% of farming households own dairy animals, yet farmers face increasing climate impacts on water, pasture, and feed. Despite contributing 9% to the national GDP, many farmers cannot apply for loans from formal financial institutions. We’ve partnered with the Central Dairy Cooperative Association of Nepal, representing 700,000 dairy producers, to bring access to digital loans to farmers through their dairy cooperatives. In addition, as a company co-founded by women, Aloi aims to create a system designed for women, rather than adapted for women, including intentional designs of literacy-friendly technology and partnerships with women-focused financing mechanisms. Over 80% of our micro-entrepreneur users are women currently.