Towards Using Blockchain Technology for Microcredit Industry in Bangladesh

Abstract

In the era of modernization, poverty and hunger is a curse for the developing and under developed countries. Micro- credit is a groundbreaking idea that can help in defending the problem. But there is a problem in accomplishing the task due to trust and security issues. In this critical situation of poverty, these issues hinder the rate of success. Central databases have many issues with security and trust. In this paper, a comprehensive approach to implement a system for the micro-credit distribution and management is described. Being one of the most emerging technologies, blockchain is used to ensure trust, security and reliability. NGO/MFIs and registered miners will be able to act as nodes. The data is completely secure, as each block is encrypted. There is reward for the miners which will enhance the field of employment. Borrowers have a defined credit which is deducted at the time of borrowing and refunded during returning the borrowed amount. Borrowers have a reputation point based on borrow and return. A group of well reputed borrowers will be able to form an MFI. A portion of interest will be deducted as network charge which can be deposited as VAT in the government fund.