Decentralized Application (DApp) for Microfinance Using a Blockchain Network

Abstract

AbstractBlockchain is a distributed ledger for keeping an everlasting and immutable log of information about various transactions. It acts as a decentralized database and is run by processors which are part of a peer-to-peer (P2P) network. A smart contract is an agreement stored as a computer code which would be triggered inevitably when positive settings are encountered by possibly avoiding reliable third-party establishments. With blockchain technology, smart contracts could be decentralized, so that they are fair and trust less and are not controlled by one central institution. By way of consensus mechanism which requires agreement from more than 50% of the peer nodes, it is nearly impossible to hack a blockchain network. Blockchain in microfinance eradicates the need for trusted authorities, increases the speed of KYC process using digital identity creation and increases transparency. The objective of this work is to study various types of block chain networks to implement a DApp for microfinance. Microfinance usually refers to minor amounts of credit for small scale businesses and is intended for excluded customers who are unable to avail conventional sources of capital. This sector faces the challenge of increased interest rates, diminished service availability, sluggish KYC procedure and disproportionate transaction charges. The intent is to enable farmers directly procure a loan from their prospective customers. The customer in turn will get benefitted by getting the produce at a reduced rate from the farmer.KeywordsP2PDAppSmart contractsBlockchain network