Masa Finance Receives $3.5M in Pre-Funding to Build Its Decentralized Lending Protocol

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Masa Financea hybrid credit protocol and a decentralized credit bureau founded by the CEO of Pngme. Brendan Playford raised $3.5 million in pre-funding at the end of 2020. According to the statement, the company aims to “disrupt the traditional centralized lending infrastructure by providing individuals, businesses and developers with the tools to access loans” through blockchain technology.

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Basic principle for blockchain centers on the ownership of assets, including money and financial data. The system is somewhat trying to reduce control over traditional financial institutions such as banks and credit bureaus, which for decades have collected and stored financial information about people who use banking services around the world.

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The premise of decentralized finance goes beyond this segment of the banking people. Analysts argued that technology can reach places not covered by these financial institutions. Blockchain could allow unbanked individuals to have faster access to services such as lending, getting a loan and buying insurance, they said.

However, there is still scope for collaboration between both worlds, or at least in the case of Masa Finance, even if it is aimed at underserved people.

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Masa Finance links traditional financial accounts and assets from credit bureau systems and banking data to users’ crypto-currency assets. This connection allows a company to create non-fungible credit reports for users, which they can use to access loans and other financial instruments.

Masa Finance

“The vision I had for a very long time was how credit bureaus evolve and what they will look like in the future,” the Playford founder told TechCrunch by phone. “The future of the Masa protocol must be fully decentralized, turning management and management into a DAO structure“.

Before launching Pngme, an open finance startup that has raised over $18 million in venture capital funding, Playford actively worked in the blockchain and crypto space for almost ten years. In February last year he disclosed that this involvement prompted him to offer short-term crypto loans to entrepreneurs, especially in Kenya and Tanzania, as well as traditional loans through Pngme, before moving into the open finance game.

Masa Finance is the result of these joint ventures. According to Playford, ibuilt on three blocks: unlocking financial data (which Pngme does), new sources of capital, and enabling people to own and share their credit history with any lender.

The startup’s web3 infrastructure works with over 10,000 offline data sources from credit bureaus, banking data aggregators and alternative data around the world. 78 countries allowing Masa to create credit scoring for its users online.

So by aggregating off-chain and on-chain data into a non-fungible credit report, Masa says it gives creditors and Developers access to the tools needed to evaluate borrower risk and launch loan products for individuals and legal entities around the world.

“The world we’re building for is where people’s data is stored. belongs themselves. This will connect the offline world with centralized data to the new online world that will grow over the next 10 to 20 years,” said Playford, who runs Masa along with the chief of staff. Dusty Schwartz. “So you can connect different data sources to create a credit profile stored on Masa in a decentralized way and have sovereignty over your decentralized credit profile.”

Masa says his online data covers 26 integrations, from exchanges to wallets, the opening of a market of 4.95 billion people, 67% of whom are invisible to credit. These wallets include Binance, Coinbase, FTX, Gemini, and Metamask.

“The reason they partner with credit bureaus is because it increases coverage for most users.. Our mission is to get the next billion people into DeFi by providing credit bureau reports. And for that, you have to maintain the existing infrastructure and collaborate with those who are currently in the market,” Playford said when asked why Masa chose a hybrid model instead of a fully decentralized one.”

Playford said Masa is being built on Celo and Ethereum, and the platform, which is launching from beta, has 36,000 people already signed up. Most of its current users founded in sub-Saharan Africa, in particular Nigeria and Kenya. Users from these countries, including Uganda and the Philippines, are responsible for the largest volume of loans received from Goldfinch, $25 million competitor from a16z and Coinbase Ventures in January.

Masa Finance says it has over 2,100 node operators on its testnet that support zero-knowledge private transactions and smart contracts. Up to 300 developers are also registered, seven projects are registered for integration. The first lending products launched by the protocol include a credit-building loan, unsecured loans, and a credit line for small and medium-sized businesses through its app, the company said in a statement.

With the help of the new capital, Masa claims to have recorded double-digit growth on a monthly basis since the beginning of the year. The non-lead investor round comes from traditional and web3-focused venture capitalists.. These include Unshackled Ventures and Lateral Capital (Pngme sponsors), heads of GoldenTree Asset Management, Flori Ventures and GSR. Other participating investors are Decentranet Intersect VC, Peer VC, Alves Ventures and some fintech/blockchain angels.

“This releasedsecond time backing Brendan Playford, and it’s no coincidence,” said Manan Mehta, general partner at Unshackled Ventures. “What Masa reflects is more fair a future that provides access to capital for the world’s population, mostly ignored by traditional finance.

The statement says that Masa will hold a seed round next. Subsequent The funding will allow the company to hire more engineers, launch a production version of the protocol, conduct a public token sale, scale node operators, and attract developers and lenders to the platform.

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