Gluwa uses blockchain to help investors fund loans to the unbanked

Debit and credit cards, online banking, and access to loans are part of daily life in many countries. However, an estimated 1.4 billion people are underbanked or unbanked, meaning they lack access to basic financial services. Many live in emerging markets that lack a basic financial infrastructure, making it difficult, if not impossible, to build a credit reputation, accrue wealth, or grow a business. San Francisco-based startup Gluwa is using blockchain to close the financial gap, but they needed a reliable, scalable cloud solution to do it. 

“Without convenient access to credit, it isn’t easy to grow and foster an economy,” says Alan Kong, Head of Marketing for Gluwa. “The fact is, a lot of underserved, underbanked, or completely unbanked users have difficulty getting credit or loans for their personal or business lives because they live in an emerging country that lacks the required infrastructure.” 

Gluwa is combining blockchain technology and Microsoft Azure to connect investors with people in emerging markets. It is not your typical financial institution, however. The company is comprised of a global team distributed across the US, Canada, South Korea, and several other countries. It employs a broad spectrum of experts from several industries including blockchain technology, cryptocurrency trading, computer science, high traffic systems, clinical psychology, aerospace, and naturally, financial services. However, its most distinguishing characteristic is technology. Specifically, the blockchain.

Traditional financial services operate within the oversight of a local or regional jurisdiction. That limits what lenders can do—and where they can do it. With a decentralized, permissionless blockchain network, there is no single entity that has full control of the network, removing those limitations. “That’s our biggest differentiator,” Kong says. “We connect users across the globe with our borderless financial technology.”

Gluwa is putting that freedom to good use, connecting everyday investors with capital opportunities in emerging markets and needed a technology foundation to support it all. The company leverages Microsoft Azure to power its blockchain-related services. There are two distinct sets of services offered on Azure, each designed to meet specific requirements: Gluwa and Creditcoin. The eponymously named Gluwa decentralized financial platform connects investors with financial institutions that lend to people who don’t have access to traditional funding options. Because financial institutions record loans on the Creditcoin network, investors are better informed and can gain valuable insights due to the natural transparency and immutability of the blockchain-based credit bureau.

Overcoming barriers and borders with blockchain

One of Gluwa’s first partnerships was with Aella, a diversified credit payment platform with more than two million users. “Our CEO Tae Oh partnered with Aella on a project in Nigeria,” Kong explains. “That’s how (Aella) saw it can use blockchain technology to improve financial inclusion within emerging markets, which then allows them to track credits, give more loans, have more trust, and offer more credit to those who are trustworthy.” 

“Individual loans are offered on blockchains, meaning they’re offered via cryptocurrency that’s mapped,” explains David Lebee, Chief Software Architect for Gluwa. “We call them stable coins, since the exchange rate is mapped one-to-one with the regular currency of the country.” For example, a loan extended to a recipient in Nigeria would use an exchange rate of one stable coin to one Nigerian coin on the real-world market.

The issue? How to convert loans made on blockchain into tangible, spendable assets. “The people on the ground need access to cash because most of these markets operate on cash, not digital purchases,” Lebee says. Usually this would be done by going to an ATM and making a withdrawal. That’s not possible in markets with no financial service providers. Aella and other partners like it needed to get creative to solve the issue. One solution: integrate with credit card providers to offer ways to use digital currency without having to exchange it for cash.

In addition to loan distribution, loan repayments are also made through Creditcoin, which creates a public ledger of each recipient’s history. That enables recipients to build up a financial reputation and establish a credit history on the blockchain. This also unbinds the recipient from using specific credit lenders because financial institutions, when given permission, can see the recipient’s full ledger, including payment history. This serves as a credit reference for those who cannot achieve a traditional credit rating.

Bridging the gap between digital and physical worlds with Microsoft Azure

Building and maintaining a blockchain-based platform required a reliable, scalable cloud solution with strong data security and privacy features that also met the unique needs of its two primary products: Gluwa Invest and the Creditcoin blockchain. The Gluwa Invest product, built in the .NET framework, is designed to encourage the investment of stable coins, enabling users to earn interest while also offering basic wallet functionality across various blockchains. (For example, the Mainnet Ethereum, Binance, Bitcoin, and Gluwa’s private chain, among others.) 

The team selected Microsoft Azure to power its blockchain-related services based on a combination of strategic considerations and technical advantages that were particularly well suited to the flagship products. “Azure, unlike other clouds, doesn’t force isolation, so that matches with blockchain, where not everything has to be behind private networks. That works perfectly for us, because blockchain is public,” Lebee says. Native .NET compatibility was also a core consideration.

“Azure aligns seamlessly with .NET technologies, making it an ideal environment for deploying and managing Gluwa Invest,” Lebee notes. “And when Gluwa initially deployed its blockchain applications on Azure, the platform offered several compelling advantages that reinforced our decision to remain there.”

The Gluwa development team used Azure Container Instances and Azure Kubernetes Service (AKS) to facilitate and streamline peer-to-peer discovery. “Using Azure Container Instances made it easy to create public endpoints, while AKS offered a powerful combination of peer-to-peer and load-balanced remote procedural calls,” Lebee says. “These features enabled us to ensure predictable and efficient communications between nodes on the blockchain network.”

Gluwa chose Azure App Configuration to centralize its application settings. Azure CDN and Azure Storage accounts provide a secure way to deliver public media to customers. The team opted for Azure DevOps to manage its life cycle builds. In addition, Gluwa chose Azure App Services and serverless Azure Function Apps to serve APIs and Azure Redis to distribute cache between the company’s API services. This enabled Gluwa to manage distributed locks for critical sections of the company’s sensitive data, as well as who could access it.

The company selected Microsoft Azure SQL and Azure Cosmos DB to create stress-free database instances that can be scaled with just a few clicks. Azure Monitor and Application Insights were implemented to provide a view into how Gluwa services are used as well as potential issues. Azure Kubernetes Service (AKS) completed the solution. Gluwa used AKS to host its blockchain network bootstrap nodes and RPC nodes, while Azure Load Balancer could retrieve P2P IP addresses.

The solution has exceeded expectations for both the IT and business sides of the house. In addition to providing a strong platform for the company’s products, it has boosted operational efficiency as well, Lebee says.

Big impact and a road forward

“The business impact has been incredible—reliable uptime, clear and very stable services, and rich products that ensure we have different ways to do the same thing with a large variety of benefits,” Kong says. “But the bigger impact is what we’re able to do because we chose Azure.”

To date, Gluwa/Creditcoin has helped facilitate nearly 4.27 million loan transactions with a total value of more than US$79.7 million. Each transaction represents an opportunity to grow and prosper that would not otherwise be possible. Many were funded at least in part by investors who are worlds away from the recipient. And all were made possible by technology built on the foundation of Microsoft Azure.

Find out more about Gluwa on Twitter and LinkedIn.