Celso Cardoso Pitta Jr., the founder of the bitcoin-based peer-to-peer lending service BTCJam, has spent over a decade thinking about how to make it easier for borrowers to get loans in emerging markets. What emerged was San Francisco-based BTCJam, a startup that aims to connect wealthy lenders with borrowers in places like Brazil. It’s one of the first companies to apply bitcoin’s advantages as a cryptocurrency to markets where they can do the most good.

Borrowers in countries like Brazil have a hard time, Pitta says. The prospect of getting a loan in emerging markets can be terrifying. “Interest rates in developing countries are very very high,” says Pitta. “The average interest rate for the BRIC countries of Brazil, Russia, India and China is 175 percent per year.”

Pitta cites stories of families who were forced to take out loans to pay for unexpected medical issues who are then forced deeper into poverty just paying off the interest on the loan.

BTCJam uses an advanced credit-scoring system based on information available online to rank its borrowers, as a way to give lenders viable information about their prospective debtors even if there’s no real credit history for the loan applicant. That matters in emerging markets where many people still don’t have access to credit.

What’s more, there are no real alternatives for borrowers. Unlike the U.S., regulation in Brazil makes peer-to-peer lending almost impossible, according to Pitta. “If you do peer-to-peer lending in brazil you go to jail for 10 years,” he says, because the law only permits financial institutions to make loans.

Using cryptocurrencies like bitcoin, and tapping foreign lenders, helps BTCJam avoid regulatory issues. “We are one of the first real use cases for bitcoin,” Pitta says. “Today people circle around buying and selling of bitcoin, but I don’t think bitcoin increases in value because it’s a commodity or a currency. It needs to be useful.”

The case for BTCJam was persuasive enough to attract the attention of several early investors. The company closed its $1.2 million seed round in February from institutional investors like Ribbit Capital, whose bitcoin portfolio also includes Coinbase and Xapo, 500 Startups, which accepted the company into its accelerator program in 2013, and Funders Club. Individual investors in the seed round included Barry Silbert, founder and chief executive of SecondMarket, which is working on a bitcoin trading platform.

While bitcoin’s adoption is highest in developed economies like the U.S. and Europe, emerging markets are also seeing their share of cryptocurrency use.

For BTCJam, that means processing roughly $5 million in bitcoin-backed loans as of May through 5,000 transactions. Typically around 20 investors will syndicate on each loan and the loan repayment rates since the company launched is roughly 90 percent, according to Pitta.