Blockchain technology may have started with Bitcoin, but it’s now gone a lot further. Many impact-focussed projects are finding blockchain enabled systems like smart-contracts and decentralised-finance (DeFi), are useful tools to help them steer targeted capital to projects in need. 

A few weeks ago we wrote about Project Carbon, a voluntary carbon marketplace, supported by NAB, aiming to bring price stability, and verification, to carbon credits. It is built on a private Ethereum platform with ConsenSys as the technology partners.

Then there’s Climate Impact X, a collaboration between Singapore’s DBS Bank, the Singapore Exchange (SGX), Standard Chartered and Temasek. The joint venture aims to avoid the fraudulent issuing of forest carbon credits to projects that may not be maintained into the future. 

BHP has signed a nickel supply deal with Tesla, and part of the deal involves the two companies working together to make their supply chains more sustainable. Part of this will be using the blockchain to provide an immutable record of the source and pathways of the raw materials. It allows customers to trace and verify the practices used in the mining process. A further benefit is that it allows producers to share source information that can’t be altered, without having to share commercially sensitive materials.

And, then there’s LendForGood, an impact-loan platform currently under development. It’s being built by Cameron Neil from Red Hat Impact, Tom Dawkins from Start Some Good, and their teams.

OnImpact spoke with Cameron about what they hope to achieve with the platform, and how the blockchain is being utilised. 

The LendForGood Mission

Many readers will know the work of Cameron and Tom, and they’ll know they’re committed to using an innovative range of communication and financial services tools to help build impact projects. 

“It’s Kiva but with larger ticket sizes” Cameron says,  “And there’s actually a return on the money. It’s Birchal for impact debt, except it’s potentially global.”

The lending platform offers flexibility to intermediaries who bring potential deals to the platform. They set the funding size, the rate of return, and the minimum and maximum parcel size.

“We’re a services platform, we provide services to intermediaries. Red Hat Impact is the first customer, but, we’ve already got some signed contracts from other providers; SEFA is on board, so is Collab4Good, and Zebras Unite.” Cameron says.

“The intermediaries put forward the deals, and so it’s their reputation on the line. The data shows deal flow, how many of them have been repaid, and how many of them were defaulted, etc. So your track record on the platform becomes a signal to lenders.”

Cameron and Tom are focussed on finding ways to direct capital to projects most in need, and part of their impact is by ensuring fees and friction are minimised, and this is where DeFi and the blockchain comes in. 

“When confronted with how we execute on this, we spoke to mainstream financial institutions that are committed to impact and couldn’t really find a way to get it done just because the model is focussed on deposits to a bank account, and then that organisation makes a decision of where to put the money.” Cameron says.

“And for us, to facilitate this more peer-to-peer, lender-to-borrower approach, we realised FinTech looks like the way we need to go. Obviously, it’s a bit wild-west in that space to find something that you can believe in and trust, but we were lucky enough to be introduced to ConsenSys, who were founded by one of the guys from Etherium, so they’re not going anywhere. We found them because of the work they were doing with impactio and WWF. The product they offer is like SAAS, as opposed to having to build something from scratch.”

The LendForGood model will only use a limited suite of tools from ConsenSys. They won’t manage crypto payments, and interoperability will be limited beyond ethereum. The system will based on ethereum’s smart-contracts, simplifying the management and governance of the loans. 

“We’re essentially using it for efficiency and effectiveness, to connect one borrower signing once, and one lender signing once, and being able to syndicate that whole loan. All powered by the smart-contract engine in the back end, to facilitate those signings and exchange. But also, the storage of all the agreements.” Cameron says.

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