Interest and remittance fees can cause the un- and underbanked to pay upwards of 10–30% in remittance fees and interest on loans. Depending on the circumstances, some loan rates can climb even higher. As a result, microlending has become increasingly popular across the globe, and especially prominent in Islamic culture.

Everex aims to significantly reduce the cost of international remittance and provide micro loans with low transaction and conversion costs by leveraging blockchain technology approach. International remittance costs are currently very high, with the cost of sending funds internationally at around 7.5%, according to the World Bank Group. While microloans may be cheaper up front, often they can very easily accrue a large debt.

Seeking to resolve these issues while also being Shariah compliant, including facets such as riba, Everex will offer competitive microlending rates and remittance fees while promoting rotating savings and credit practices through smart contracts.

By placing all of their records on a publicly auditable blockchain to help the underserved establish a credit history, as well as reduce the fees paid out to high-cost village savings and loan providers this crowdsourcing model encourages group accountability and expands on some operational efficiencies of traditional rotating credit and savings associations.

What are the pain points for the un- and underbanked?

Remittance fees can easily soak up a significant portion of the funds sent in the current market, as highlighted in this from the World Bank which shows the total value of global remittance being more than US $600 billion annually. If that $600 billion dollars were reduced by 7%, then that could put as much as $42-billion per year into the hands of approximately 225 million migrant workers and their families on a yearly basis. That is roughly $186 per person, per year.

The estimated market size of migrant workers and their families is roughly 1.2 billion people and nearly 1 billion others worldwide such as expatriates and travellers, totalling over 2 billion people, more than 35% of the global population. To sum it up, un- and underbanked individuals suffer from:

High remittance costs and bank surcharges

Opaque banking operations with hidden fees

Long waiting periods to receive sent money on the other end

Confusing and strenuous paperwork required to send funds

How does Everex solve these issues while being Shariah compliant?

Shariah compliance requires lending parties to avoid benefitting from riba. This is most commonly used in reference to charging interest on loans, credit cards, and other payment vehicles. Usury refers to practices such as charging outrageous interest rates on loans in order to trap people in debt, a practice often called “loan sharking”. Such practices formed a necessity for prohibition of usury and riba

A commonly accepted interest rate for usury is around 12%. To prevent taking the fruits of riba, Everex will use micro-loans with competitively low rates, underwritten by experts in their field, assisted by artificial intelligence.

For transparency, Everex spells out the terms of micro-loans and remittance fees in every contract and uses the Ethereum network to maintain public auditability. Everex avoids long wait times by using blockchain technology, and uses smart contracts to reduce or eliminate the need for paperwork.

How do the underlying technologies assist with compliance?

Everex relies on Cryptocash technology, proof of existence, escrow, and financial institutions to digitize fiat currencies, increase transaction speed, and minimize fees for migrant workers, MSMEs, and others who make use of microlending and remittance services.

Underlying technologies such as Chainy, Cryptocash, EverexWallet, and Ethplorer which can enable easy auditability, smart contract coding, and reduce the barriers to adoption of their platform for the public are owned by Everex. This gives Everex an advantage when providing financial inclusion and affordable remittance for their users. Owning the underlying technology enables Everex to customize their product and operations to suit the needs of their customers.

Everex covers financial inclusion and Shariah compliance

Everex intends to establish and maintain Shariah compliance during operations with Islamic customers. Among the methods slated to be used in compliance are flat-rate lending smart contracts which align with prevention of riba qard, growth due to interest outside the scope of an agreement; and riba jahiliyyah, debt growth in response to defaulting on payments.

By ensuring Shariah compliance and offering financial inclusion, Everex hopes to relieve financial stress on migrant workers, their families, expatriates, and any other individual that may fall into the category of un- and underbanked, totalling a market of more than 2 billion individuals.