Pilot Insights | Unlocking DeFi-powered Credit for Microentrepreneurs in Colombia
Image courtesy of Quipu
Mercy Corps Ventures partnered with Quipu and Anzi Finance to pilot a DeFi credit solution for Colombian microentrepreneurs. Quipu developed Nudo, a protocol that connects decentralized stablecoin capital to MSME borrowers, offering fixed yields backed by real-world lending. Risk was mitigated via an on-chain guarantee fund managed by Anzi Finance, automating issuance and claims through smart contracts. Capital allocation relied on Quipu’s AI-driven credit scoring, analyzing digital behavior, transactions, customer feedback, and demographics. Funds were disbursed in Colombian pesos via digital wallets like Nequi and Claro. The pilot issued 313 loans averaging $108 with a 3-month tenor to 264 microentrepreneurs, 39% of whom were women. Each loan carried a 3.5% guarantee fee paid to Anzi, which insured up to 25% of its value. Like an insurance policy, this upfront fee shields liquidity providers from full losses, limiting their risk to only a portion of failed loans.
Insights in Brief
DeFi-enabled capital expands access to affordable credit for MSMEs excluded from formal finance. 61% of approved borrowers had negative credit bureau histories, typically a barrier to traditional financing. Moreover, 58% of approved clients had multiple negative reports, 60% of which were tied to prior loans from formal financial institutions—underscoring the limitations of traditional models. By leveraging decentralized capital and alternative credit assessments, the pilot unlocked financing for a high-risk yet underserved segment.
Affordable credit strengthens climate resilience among MSMEs. 86.4% of borrowers reported improved capacity to manage climate shocks. 79.6% saw significant income growth, and 65.2% reported an increase in customers, highlighting the link between financial access, business growth, and adaptive capacity.
Uncollateralized DeFi lending to excluded borrowers carries a high risk profile and requires layered protections. While 72% repaid on time or within 7 days, 25% of the guarantee fund was triggered, showing that risk intensifies over the loan cycle. Structured safeguards, including guarantee funds and off-chain collateral, are essential to protect capital and ensure viability in informal markets.
AI automation cut operating costs by 10% even as disbursements grew. Deploying AI for collections and loan processing streamlined the team from five to two, supported by an AI collections agent and WhatsApp assistant. This boosted credit applications by 15% and doubled daily client throughput.
This report is the second of a two-part series. The first blog outlined the pilot launch, our learning questions, and the hypotheses we set out to prove. This final report provides an overview of the impact of the solution, and the key insights and learnings from the pilot.
