Study Overview
Haraka leverages blockchain, local stablecoins, and community trust to reimagine micro-finance and expand financial inclusion and health of underserved populations. Savings circles are a crucial segment of last-mile financial services for the estimated 510 million individuals worldwide who have turned to informal and self-organized village savings and loan associations (VSLAs). Despite the crucial role that VSLAs play in providing services to underbanked people, especially women, savings groups remain excluded from access to formal credit. The goal of this research is to understand how access to credit for savings groups and their members might be expanded by coupling machine learning methods with data on VSLA transactions, digital records, and information on the groups’ social capital, reputation and cohesion when assessing creditworthiness. Technology is rapidly digitizing many aspects of saving groups’ functioning, including group interactions, access to information, digital record-keeping, and electronic transactions creating invaluable digital footprints. This information is then combined to build a self-sovereign AI/ML credit score for individuals, enabling them to access financial opportunities beyond their immediate communities. Beyond traditional measures of access to credit and creditworthiness, we are also interested in possible impacts on members’ economic activities and their performance, as well as downstream impacts on wellbeing and gender empowerment.
Study Results
Pending
Intervention: Innovative credit scoring to expand access to financial services leveraging blockchain technology
Intervention Partner: Haraka
Populations: Rural, underbanked in community savings and loan associations
IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)
News & media
Leveraging reputation and local stablecoins to improve credit access for unbanked VSLAs in Ghana
December 3, 2024
Mercy Corps Ventures, Haraka, and Grameen Foundation launch a new pilot to increase financial access for unbanked women, testing the use of social reputation and social guarantees to underwrite DeFi microloans issued in local currency stablecoins in Ghana.