Project aims to give microcredit to 3.5M people by using cryptocurrency, online marketplace in Turkey by 2030
A Turkish NGO is set to use blockchain technology to enable entrepreneurs to get funded by social investors anywhere in the world, the head of the foundation said on Friday.
In an exclusive interview with Anadolu Agency, Aziz Akgul, the head of Turkish Foundation for Waste Reduction (TISVA), said blockchain-based microfinance is inevitable not only for the future of Turkey but also for the entire world.
“We want to give microcredit to 3.5 million people by employing cryptocurrency and e-marketplace in Turkey by 2030,” he added.
The main target of TISVA — which oversees the Turkish Grameen Microfinance Program (TGMP) — in launching such a project is to solve the problems of global microcredit community in finding financial sources for the poor.
Turkish Grameen Microfinance Program is a non-profit economic foundation offering “microcredit” services to help reduce poverty in Turkey, according to their website.
“TGMP came up with the idea that creates an alternative financing model for social businesses to alleviate poverty through blockchain,” Akgul said.
Pointing to the rising popularity of using cryptocurrencies like Facebook’s Libra, Akgul claimed that the world has entered a new era in which the number of banknotes in circulation will fall.
“The market size will not be confined to Turkey,” he said. “The initiative will be extended to micro-entrepreneurs all around the world.”
Citing a report released by Oxfam, an international confederation of NGOs working to reduce poverty, Akgul said the wealth of the world’s richest 26 people equaled to that of 3.8 billion poorest people in 2018.
“We aim to impact the lives of these people through the project,” adding that financial inclusion as the primary concern of the project is an important step toward reducing and ending poverty.
He suggested that blockchain technology will eventually enable anyone with an Internet connection to have access to a wide variety of poverty alleviation services at a fraction of the cost.
Blockchain is a database of financial transactions which is saved on multiple computers and constantly grows as new transactions or “blocks” are added to it, forming a continuous and public chain of data.
He also explained that under the project, 300 million MicroCreditCoin (MCC Token) and mobile wallets have been produced within the Ethereum blockchain technology, the popular cryptocurrency based on the use of tokens, which can be bought, sold, or traded.
How does MCC Token work?
According to a white paper released by TGMP, the framework of blockchain technology and MMC Tokens will be used to carry out the peer-to-peer (P2P) banking operations.
These tokens will be based on an Ethereum protocol and be integrated into the microcredit operations, the paper says.
Users will be able to employ MCC Token through mobile wallets available on Android and IOS systems.
Potential investors would be business people, philanthropists and social business investors from various countries.
NGOs would become an important segment of the investors for e-marketplace platform, which is an open P2P platform that allows users to make direct pinpoint donations.
Organizations which support the blockchain technology would also be among the potential investors of MCC Token.
The system will allow anyone to view their financial history and thereby prove their ability to repay a debt, meaning transaction will be made in a very transparent manner.
“Investors will contribute by buying the MCC Token which would accelerate the value of it,” the paper said. “Afterward, the system will allocate the money automatically to the projects considered suitable for the micro-entrepreneurs.”
Supply partners will contribute to the program by providing their products and services for micro-entrepreneurs in exchange for MCC Tokens.
TGMP’s micro-entrepreneurs, for instance, could finance their daily shopping from local markets in local markets through digital wallets within the MCC Token mobile application.
Some donors are able to support only specific projects, so through this program it will be convenient to invest money indirectly through microfinance by leaving the funds in the MCC Token pool, said the paper.