LoanMinnow

Microloans, macro change: money lending with social impact

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Inspiration

Micro-enterprises can be thought of as very small businesses. They tend to have fewer than 10 employees, but a vast majority are run by just one person. Especially in developing nations, micro-enterprises have emerged as an important source of income for many. According to research conducted by Opportunity International, 61% of the world’s employed population works in the informal economy. At the same time, 1 in 3 people in the world do not have a formal bank account. In societies where it could be difficult for certain demographics to qualify for a loan, those people may have a hard time acquiring the capital needed to start their venture.

Microloans emerged as a possible solution to this dilemma. Reflective of the small scale of micro-enterprises, microloans are very small loans aggregated from many members of the community. The short-term nature of the payments and small size of investments make it possible for those without a credit history to repay their loans without defaulting. Bangladesh, in particular, saw success with microloans in promoting the growth of local businesses.

We were inspired by this altruistic loan system to create a digital platform that could facilitate microloan transactions.

What it does

There are 2 main entities in this app: lenders and borrowers. After users create an account, lenders can browse through a feed of small business ventures that are requesting funding. If a lender finds a venture that they would like to contribute to, they can choose to invest small sums of money and eventually gain a return on their investment through a short-term interest rate. Borrowers can pitch new ventures by describing their needs through a request that gets sent to user feeds.

Transactions are conducted through an in-app credit system. To promote fair interaction and transactions, all users are assigned a credibility score based on their repayment history. All users can simultaneously act as a lender and a borrower, and each profile is able to access a record of investment and payment history.

How we built it

We built a web app using React.JS and TypeScript for the frontend, Flask and Python for the backend, and Figma for UI design. The Flask backend incorporates different open-source libraries for user authentication (Flask-Login), API requests, and database management (SQLAlchemy). We tried to design our app in a robust way by creating a variety of routes to allow for maximum optimization of database information retrieval. The in-app credit system can perform real-time updates on user profiles. These concurrent updates are made possible by helper libraries in Flask. State-of-the-art authentication and hashing are used to preserve maximum information security.

Challenges we ran into

The biggest challenge for us was figuring out how to connect the React Frontend with Flask Backend, and how to process API requests. All of us were moderately familiar with this process, but had never previously built a fully functional system from scratch. We had to read lots of documentation, blog posts, and get help from our AI friends at OpenAI and Perplexity. Wireframing in Figma was important in helping us to decide on a modern and easily accessible frontend look. There were some challenges with figuring out how to display images on a moving feed, and how to store images and update them in real time for our users. We also encountered significant difficulty with implementing the search bar feature.

Accomplishments that we're proud of

We are proud of all the technologies we were able to learn and implement within the span of just 24 hours. We had limited to no experience with frontend development and connecting our frontend to backend using API requests. It was remarkable how well our team was able to regroup and divide up workload in order to fight every challenge that was thrown at us. We are very proud of our entire app, the way it looks, and the sheer amount of various technologies implemented during this project. The way it all came together is very satisfying and something we will cherish from our time here at SpartaHack.

What we learned

Apart from the technical skills we obtained (React.JS, Flask, API Requests, SQL Databases, Figma, UI/UX design), we took away a lot of interpersonal skills from this hackathon. Throughout this project, we had to come together and discuss solutions to a myriad of problems we ran into. Communication and teamwork were key in helping us succeed during these times.

What's next for LoanMinnow

LoanMinnow is far from complete. The app’s main purpose is to reach the demographic of people in underdeveloped countries and provide them with a viable alternative to kickstarting their ventures. We would like to continue working on our app by creating a more engaging and fluid experience for the users and allowing for word-of-mouth growth of this technology. Teaming up with local government bodies would also help advance our vision and technology and help connect more lenders and borrowers together. Since our app is self-sustaining (in a cycle of lending and borrowing), we would also like to find ways to legally prevent monopolization and fraudulent lending in the future. We would also like to possibly add Blockchain technology for the payment credit system, which would add an added layer of security in the digitalizing world. Finally, we intend to create a chat-like feature for users to query more information about an effort, as well as gain “verification” tags for efforts verified by the administrators of the app.

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