The Youth Citizen Entrepreneurship Competition is an activity within the framework of the UNESCO Global Action Programme (GAP) on Education for Sustainable Development (ESD)

Microlending with Dogecoin

Published on July 2, 2014 um 11:02

Summary of your idea

Proposal - Use cryptocurrency for organised sustainable microlending. Cryptocurrency is at a stage when it transcends commodity status. People use it to buy pizzas, donuts, games, stuffed dogs and cars. Dogecoin, one such digital currency, has been used to dig wells, sponsor NASCAR drivers, build houses, and fund tropical countries at the Winter Olympics. The project will leverage the inherent advantages of dogecoin - no transaction costs, instant worldwide transfer, low financial entry barrier, no administration costs, generous community with a history of giving - to organise a sustainable microlending programme. Microfinance has been shown to improve financial inclusion and supports the entrepreneurial ambitions of a global populace. The project is split across two phases: P1) Contributions will be collected in dogecoin, converted to fiat currency and sent to shortlisted global microfinance institutions (shortlist based on repayment rates, systematic and open process, history, credibility). The funding is provided in fiat to show proof of intent from the dogecoin community. P2) Funds raised are sent in dogecoin to institutions, benefiting them with the above listed advantages. The first phase is necessary to show that (expected) smaller financial contributions from a larger base can significantly impact the funding to new entrepreneurial projects. Main objective - To raise $5,000 worth of dogecoin in the first phase of the project, and to shorlist 3 institutions which will be used as channels for impactful microlending. Loans once repaid will be reinvested to set up a sustainable base for funding projects. The completion of the first phase will signal the potential for using cryptocurrencies which break many of the traditional barriers to using smaller quanta for financial support. Empowering a bigger part of the global population will open up new means of allowing people to help others from the comfort of their homes.

Expected impact of your idea on sustainable development

$5000 can fund up to 200 entrepreneurial projects through microlending. Apart from the financial inclusion directly provided, microlending can mean a 33% increase in savings and an overall economic multiplier effect of 72%*. This innovative approach to crowdfunding will have the further advantage of including a new segment of the population that could, according to some studies, be considered more generous**. By changing the way fundraising and lending are traditionally carried out, the most visible impact will be the greater power placed in the hands of both the new lenders and the new loan recipients. There are three major factors which stand to favour the project in its potential for disrupting the current microfunding models 1)Lower entry barriers When institutions absorb/waive admin and transaction fees, they do so by setting up minimum pledge limits ($25-$50), thus blockading smaller contributions. Using dogecoin allows funds to be transmitted instantaneously at no cost. 2)Sustainable giving Institutions with a good track record in repayment and transparent practices allow a recovery rate as high as 98%. A one-time contribution funds many more projects after the first one. 3)Scalability This pilot project has an initial Phase 1 goal but replicating it requires no further capital investment. Everything can be managed and organised by a volunteer force, and once Phase 2 is complete, the bulk of publicity will be carried out by the microfinance institutions themselves. Success in this project will be measured by three factors: 1) Reaching the Phase 1 goal of $5000 in dogecoin, and successfully disbursing the same to qualifying institutions. 2) Reaching the Phase 2 goal of having dogecoin accepted directly as a currency for contributions. 3) Seeing a success of over 90% for total loans disbursed. (*www.sljol.info/index.php/TARE/article/download/5253/4210) (**http://www-2.rotman.utoronto.ca/phd/file/Piffetal.pdf)

Plans for implementation and sustainability

The project will be run by a team of volunteers with a campaign collecting funds at a designated digital wallet. Multiple people in the community have expressed interest in contributing to microlending institutions (using dogecoin) in the past, and the campaign will be run with the assistance of members from the Dogecoin_PR group. The two main tasks are running the fundraising campaign and shortlisting institutions that will qualify for receiving the collected funds. The funds will be disbursed to microlending projects chosen by the community from the qualifying institutions. Funding will come from within the dogecoin community, which has a strong history of contributing funds, especially to charitable causes. This project emphasises the use of dogecoin as a currency and will naturally boost the profile of the digital currency, thus encouraging the community to play a large role in seeing this to completion. Over time, the high repayment rates will allow for reinvestment of funds, and the success of the campaign will bring in new supporters who would be happy to contribute meaningfully with amounts that were previously considered unfeasibly small. The main project will be supplemented by other activities in the community to encourage microlending and raising awareness about it: Initiatives on matching fiat donations with cryptocurrency* and encouraging collaborative competition in the form of fundraising leaderboards. While these methods might seem counter-intuitive or even passive to those with a traditional fundraising mindset, it must not be forgotten that this community has, in its short history, raised over $150,000 for various projects and is sitting on a market cap of $80 million. In fact, if the project is accepted by a large part of the community, we expect to raise well beyond the Phase 1 target of $5000. (*http://www.ccpearce.com/crypto/social-experiment-kiva-bitcoin)

Your profile

This project is a community effort, and it would be improper to attribute its implementation to just one person. For the sake of representation in this competition, I will be the project 'owner'. I'm a 24-year-old Indian technology enthusiast currently working with a social sector consultancy group. In the past, I have worked as a Financial Analyst and as the Business & Strategy head for an international non-profit in the media sector. Part of my involvement in the social sector stems from the year I spent receiving a post-graduate diploma as a fully funded scholar at the prestigious Young India Fellowship. Ive been associated with the dogecoin community from the month it came about, and have been a part of the two dogecoin_PR groups created to support the community. As a caretaker for the newly constituted group, I have also seen the rippling enthusiasm that has driven the community and brought it attention worldwide. My first project in the community, a crowdfunding platform for non-profit initiatives, was selected for and supported by the Microsoft Youthspark-sponsored Sprout programme. Going through a project-based learning experience, I caught a small glimpse of the huge potential behind using dogecoin for funding entrepreneurial ventures. Coupling this with the low entry barrier that it enables, this project could signify a shift in the way smaller financial contributions are viewed by social sector organisations. I am pitching this particular project because I see microlending as a way to encourage entrepreneurship, especially in cases where the alternative is financial exclusion. With the dogecoin community's history of generosity and the potential of this project for changing people's lives, I have little doubt in its success.

Video (optional)

Stage of Idea

conceptual stage, planning stage

Your idea has a positive impact on

poverty reduction, sustainable trade, empowerment of women, youth

Dogecoin!

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Comments

August 2, 2014 11:31

The voting period has closed. Thank you to the (nearly!) 9000 people who supported us :)

July 31, 2014 21:38

Did you vote already? That could be why. Otherwise, try listing the ideas from the menu at the top and vote for doge from the list of all ideas.

July 31, 2014 19:28

Why won't it let me vote?

July 28, 2014 15:26

Too the moon!

July 28, 2014 06:30

An innovate means to get the youth started on the crumps never considered something.

kbz
July 28, 2014 05:41

Love the idea. :)

July 24, 2014 20:08

Voting closes with the end of July. So, this is the last week of voting :(

July 24, 2014 20:03

How much more time do we have?

July 23, 2014 20:04

A Great proposal and keeping with the tenants of being a Shibe great job! I will spread the word to the best of my ability.

July 21, 2014 21:40

Sweet!

July 21, 2014 20:44

Done! And thank you all for the support :D

July 21, 2014 20:33

Add a Dogecoin logo for our initiative! All the other top proposals have a logo.

July 17, 2014 20:56

I Believe We Can Do It!!!

July 12, 2014 17:17

Bravely go toward! I encourage you.