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DApact Makes Microfinance Loans Affordable for Cambodians

Lowering Interest Rates Through Crowdfunding

DApact is a digital platform that intends to reduce the operational costs of microfinancing companies. The startup's first pilot project, launched in December 2017, offered microloans at only 5% interest, compared to the national average of 18%. Rather than pay high fees on bank loans to fund the project, the platform was crowdfunded on the internet using digital coin. The lenders are paid back through cryptocurrency at rates much lower than most banks, with all transactions backed by the Ethereum blockchain. Because the DApact platform was financed by a global pool of investors using cryptocurrencies, operating costs were drastically reduced, and loans could be offered at a lower rate.

DApact Loans Have Had a Perfect Rate of Return So Far

Pierre-Marie Riviere, who leads the DApact network, said that people think that interest rates on microfinance loans are high because they believe that low-income borrowers pose a great credit risk. He refutes this notion and argues that Cambodia's non-performing loan rate in 2017 was at just 2-3% and the project has kept a perfect 100% rate of return. To date, DApact has been very successful, having issued 15 microloans ranging from USD 500 to USD 1000 through five pawnshop underwriters in Phnom Penh. Developers look forward to continuing to launch new pilots that will demonstrate the inherent success of the model. Ultimately, DApact will approach the National Bank of Cambodia to prepare for a full launch of the platform.

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