Social Micro Lending

The goal of this project is to provide microcredit solutions to underserved urban and rural populations in Nigeria, enabling them to finance productive assets and small-scale business activities.

Borrowers can request a loan by sending a message through USSD. This approach is a key strength of the project: the user experience is adapted to local constraints, where access to web platforms and traditional banking services remains limited.

Users are identified through their NIN (National Identification Number). By law, their NIN is paired to their sim card This allows us to reduce fraud, track borrower history, and reward responsible behavior. To strengthen our credit assessment, we integrate the third-party verification tool Dojah, which aggregates data on identity, financial activity, and risk indicators.

The project is inspired by the vision of Muhammad Yunus and aims primarily at financial inclusion and poverty reduction. There is a well-documented paradox whereby the poorest populations often face the highest borrowing costs. Our objective is to offer fairer access to credit. While profitability is not the primary goal, we expect the model to become profitable by Year 3.

We target an interest rate of approximately 10% per year, which is relatively low compared to typical microfinance rates. Loans are short-term, with an average repayment period of around 6 weeks, allowing for rapid capital rotation and tighter risk control. Based on our modeling, we assume a default rate of approximately 3%, supported by careful borrower selection, short loan cycles, and active monitoring.

Once a borrower is approved, the backend system creates a dedicated wallet on XRP. This wallet receives funds from a global capital pool (“vault”). The vault is financed by international institutions and companies seeking both ESG impact and strategic exposure to emerging markets. In the short term, these actors aim to improve their ESG positioning; in the medium to long term, they gain access to valuable market insights and potential commercial opportunities.

Within this architecture, XRPL provides several advantages:

Lower transaction costs, particularly for cross-border capital flows Transparency and auditability, enabling investors to track how funds are allocated and measure real impact Improved trust, reducing reliance on complex and costly financial intermediaries

The final stage of the process is repayment. We implement a cash-flow-aligned repayment mechanism, where repayments are linked to the borrower’s actual income rather than fixed rigid schedules. As borrowers receive funds (for example through business activity or transfers), a portion of them are automatically redirected toward loan repayment through simple, user-driven payments or integrated payment flows with local partners. This approach reduces repayment pressure, and better reflects the irregular income patterns of the targeted population.

From a financial perspective, Monte Carlo simulations suggest that the project can reach operational profitability within three years, assuming controlled default rates and progressive scaling. Significant capital will be required during the early scaling phase (around Year 3), as adoption accelerates and the loan portfolio expands.

In a second phase, we plan to enhance the model with:

Additional repayment options, including fixed weekly or monthly schedules Value-chain-based repayment, with deductions at source via cooperatives or buyers Impact tokens, enabling investors to track performance through key KPIs (repayment rates, number of borrowers financed, economic impact)