I'm writing to propose and to get your feedback about this proposal on launching a Pilot DAO that leverages Acala&rsquo;s DeFi infrastructure to provide microloans to smallholder farmers in Africa. This initiative will serve as a practical demonstration of Acala&rsquo;s ability to power real-world financial solutions while promoting financial inclusion, economic growth, and blockchain adoption.
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Agriculture remains the backbone of many African economies, employing over 50% of the workforce. However, access to affordable financing remains a major challenge for smallholder farmers, limiting their productivity and economic potential. By using Acala&rsquo;s DeFi tools, we can bridge this gap and provide a secure, transparent, and efficient way for farmers to access microloans.
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The pilot will begin with an initial group of 10 smallholder farmers in Kenya and Nigeria, who will receive funding in ACA tokens. These funds will be used to improve their agricultural operations, such as purchasing seeds, fertilizers, and better farming equipment. To ensure smooth participation, farmers will receive basic training on how to access, utilize, and repay loans using Acala wallets and DeFi tools.
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Once the harvest is completed, farmers will repay their loans in local currency or tokenized assets. A portion of the profits will be allocated toward purchasing ACA tokens, which will be reinvested into Acala&rsquo;s liquidity pools. This process will not only support the farmers but also enhance ACA&rsquo;s liquidity and utility within the ecosystem.
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Beyond financial inclusion, this initiative presents a unique opportunity for Acala to expand its user base. By onboarding real farmers and agricultural cooperatives, we create an entry point for new users into Acala and the broader Polkadot ecosystem. Over time, these farmers could become long-term DeFi users, DAO participants, and active members of the Acala community.
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This pilot will showcase the real-world use case ACA tokens, demonstrating how Acala&rsquo;s DeFi tools can be leveraged in emerging markets. The demand created for ACA through this initiative will strengthen its value proposition and reinforce Acala&rsquo;s role in Regenerative Finance (ReFi).
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With this proposal, we invite the Acala team to explore the feasibility of this pilot and discuss potential next steps. We believe that by working together, we can create a sustainable model that benefits both smallholder farmers and the Acala ecosystem.
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We look forward to your thoughts and feedback.

- **Problem Statement:** Launching a Pilot DAO using Acala's DeFi infrastructure to provide microloans to smallholder farmers in Africa.
- **Significance:** Addressing the challenge of limited access to affordable financing for smallholder farmers in Africa, promoting financial inclusion, economic growth, and blockchain adoption.
- **Proposed Solution:** Implementing a pilot program with 10 smallholder farmers in Kenya and Nigeria, providing microloans in ACA tokens for agricultural improvements.
- **Expected Outcomes:** Demonstrating Acala's DeFi tools in real-world scenarios, expanding Acala's user base, enhancing ACA's liquidity, and reinforcing Acala's role in Regenerative Finance.

#14 Acala x African Agritech Financing DAO

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