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By Clixpesa
Making money and crypto simple for everyone
Clixpesa is an effort to build a borderless, customer-centric, all-in-one platform to serve as a trusted companion to manage and grow money while giving back control to users. By simplifying web3 for the less tech and financial savvy, we intend to increase utilization of financial products across sub-Saharan Africa. The “take it or leave it” approach to financial products and pricing has locked out many, especially in the informal sector, from enjoying the benefits of current financial trends. Furthermore, data penetration is still very low in Africa, thus by packaging our solution through the USSD channel we could reach more than half a billion users. This simple, and mostly ignored telco asset could help push Web3 mass-market adoption, not only in Africa but anywhere with no internet access.
This submission will focus on integrating two of our core products to the Stellar ecosystem: Clixpesa Spaces and Clixpesa P2P Lending.
Clixpesa Spaces is basically a savings feature where users can save for personal goals, participate in saving challenges, and also save in groups through RoSCAs. With Rotating Savings & Credit Associations (RoSCAs), users can come together as a group to help each other stay financially resilient. Users contribute to a pot, and the target amount goes to one of the users in a particular order until everyone has received a pot and the cycle starts over. This utility, commonly known in Kenya as Chamas, helps many raise funds for otherwise big financial goals such as business capital or bills. Within the RoSCAs, members can also ask for financial support for financial needs outside of the pot allocations.
Many of the unbanked and underbanked in sub-Saharan Africa utilize traditional financial methods to stay financially resilient. Many of these methods are manual, offline, and require a great deal of trust for all involved. We begin by bringing the utility of RoSCAs to web3 and online as this has stood out as the most straightforward means of saving among our communities. While RoSCAs have proven to be efficient, many are plagued with short life spans as they tend to break off after a few rounds, and internal wrangles and flight funds arise. Furthermore, some members drop off along the contribution cycle, hence breaking the chain of contributions.
Our platform helps solve these problems by offering a trustless way to save together and manage the RoSCAs. Through automated contributions, reminders, transparent transaction histories, pot allocations, and rotating signatories, the platform evens out the skill level required to manage a RoSCA and hence even the non-financial savvy member claims some level of control on their RoSCA.
Users can create a RoSCA easily by inviting their friends through their phone numbers. A user comes up with a group name, the pot allocation they have agreed upon, and selects members from their contact list. This information is then used to create a new smart contract on Soroban, and the smart contract acts as the RoSCA with all the necessary logic needed to run the RoSCA. Members then receive an invitation to join the RoSCA and after all members have joined, signatories are assigned, and a pot allocation is created. Members can then start contributing to the RoSCA by sending and locking funds on the deployed smart contract. Upon a deadline or pot allocation being filled, it is automatically sent to the pot's bearer, and a new pot is created with the next member in line. Members can appeal to appear next and here the signatories can sign upon this change. Signatories are also needed for any emergency withdrawals from the RoSCA or changes that require the whole group to agree upon. Signatories are also rotated in order to ensure everyone has power in the direction the RoSCA takes.
Clixpesa P2P Lending offers an avenue for users to request microloans on their own terms. 68% of loans in the alternative lending market in Africa are P2P loans. Clixpesa helps with creating and monitoring the credit scores of users and only recommending matches to users in order to minimize the risk of default among users. This feature is very useful for those who survive on day loans to run small businesses for purposes such as inventory purchases.
Digital mobile loan lenders and traditional shylocks have made it impossible for low-income earners to access quick loans due to predatory interest rates. Those who have no alternative and end up settling for these loans end up in a pile of debt not because they are not financially organized but mainly because the loan was too expensive in the long run. This leads to the loss of the small assets they have or even the failure of their small businesses.
This product greatly reduces the cost of loans as it democratizes lending while also opening other earning avenues for users through interest. Users can negotiate on the interest rates with their peers and since it's an open marketplace for loans, interest rates will go down as lenders look to attract more borrowers.
On Soroban, two smart contracts are deployed, one for loan offers and requests and another for active loans. When a user creates a loan request or offer, this information is stored in the smart contract and once another initiates a loan from the offers or requests, the active loan is updated in the loans contract. This contract tracks the terms of the loan, payment schedules, and any payment history between the parties involved. The creditor will then be asked to fund the loan by sending funds to the user via the Stellar protocol. Once funds are received, the loan schedule is updated and interest calculated and updated. Clixpesa smart contracts will be responsible for sending reminders to loans and calculating credit scores based on user loan behavior. This credit score is essential in matching loan participants.
Everyone wants more from their money, however, only a few financial savvies understand how to. Easy, frictionless, and accessible financial products are necessary to make them work for as many individuals as possible. To be inclusive, low-income earners and struggling small businesses need tools that put them in control of their money and unlock more ways to realize their potential.
Our initial target market is in Kenya, with plans to roll out in East Africa and later the rest of sub-Saharan Africa. Many in the informal sector in Kenya underutilize financial products due to high learning curves, costs, and the commitment involved. While making payments is easy, participating in mediums that expose them to cheap lines of credit and saving pools still has high friction.
$35.1K
Samuel Moyi
No other submissions.