LAS VEGAS–In the span of just 30 hours, a team of college students—not one of whom knew anything about credit unions or lending when they began their project–developed a secondary market lending platform that allows for CUs to invest in or sell loans fractionally and which now has the backing of a credit union organization that plans to bring it to market.

The student team, all from Ivy League schools, developed their project during a hackathon sponsored by Bank Social, Google and other companies that was held simultaneously at Harvard and Duke. More than 880 students participated.

The hackathon was part of Bank Social’s Converge Accelerator, which provides seed funding, curriculum, presentation and meeting facilities, social media production studios, and marketing platforms. More information on that can be found at www.convergeaccelerator.com.

While the students could tackle the problem or challenge of their choice—and many chose non-financial services projects–Bank Social’s John Wingate gave a keynote address at which he talked about credit unions and cooperative finance—the first time many had ever been exposed to the concepts—the result of which was that more than 100 students said they were inspired to take on credit union-related challenges.

How It All Came About

Three of the students from the winning team were on hand for NACUSO’s Reimagine Conference in Las Vegas, along with Wingate and Becky Reed of Bank Social, where they talked about how they came to create the platform called Lendora, which offers, among other things, tokenized secondary lending.

Out of the February hackathon sponsored by Bank Social, which is a fintech that offers solutions that include AI/ML and DLT, came numerous projects and approaches, but Lendora was judged to have the greatest value and most ready to be brought to market.

For teams that didn’t bring an idea of their own to the hackathon, the Bank Socia l team was there with some suggestions to go with the education on what credit unions are.

The students who were on hand to represent Lendora also shared a video that was created using AI to explain how the platform works—it was also created during the 30-hour hackathon.

What Was Built

In that short span, the team built a loan marketplace in which each loan is turned into an NFT, where credit unions can post a loan in the marketplace, and where buyers can see a full history tree on the loan, all documentation is available, and the loans are KYC compliant.

Those enhancements include the ability to buy and sell fractional shares of loans with a single click.

Q&A With Students

Three members of the Lendora team participated in a Q&A with a NACUSO audience. Because the students were likely unaware there was a reporter in the room, The CU Daily’s policy is not to use names. The students were all from Ivy League schools, including MIT and Brown.
Q: What did you know before and what do you know now about credit unions?

A: I knew almost nothing, which is really bad, because I’m part of a credit union. We were all inspired about cooperative finance and how it can uplift people. We want to be a part of that. So, there definitely was a learning curve but, luckily we had lots of great mentorship along the way to help us bring our project with success. 

Q: Why is cooperative finance important to you?

A: I am from India. I have seen how fragmented the Indian finance market is. There are a lot of gaps and lack of literacy. What cooperative finance does is it fills these gaps and increases accessibly and inclusivity. That is why it personally means a lot to us to be working on this.

Q: You hadn’t worked with blockchain before, but it’s now a big part of your project. Do you take classes in distributed ledger?

A: MIT doesn’t have a single course at the undergraduate level.

A: At Brown we have one course and I’m trying to get in.

A: All we really knew about was Bitcoin. The first thing we learned was there are different kinds of blockchain. 

Q: What did you know about lending?

A: Not much at all beyond knowing interest rates and that we go to banks, and apparently credit unions now, for loans. 

Q: From your understanding do you feel like there is some sort of roadblock in this industry with technology that is a mental thing we have to get over? Tech moves slow in this space and you built this quickly. 

Wingate: With new technologies and getting them incorporated, credit unions don’t have to be 10 years behind anymore. We can work together doing sprints like hackathons, doing accelerators, and can make it so these new technologies go to credit unions just as fast as banks. 

Another big thing is in the credit union space… a lot of it is centered around trust. I think in order for technology to be fully integrated there needs to be trust in the technology. Blockchain embodies a lot of the principles that kind of underlie credit unions…Blockchains are transparent, everything is visible on the blockchain. I think a large part of the future of credit unions is going to be around being transparent, being able to trust the systems 

Investors Sought

At the end of the session BankSocial said it is looking for credit union investors in the Accelerator fund, and that it does require participation and time. Investors can bring forth problems that are then taken to a hackathon.

What’s Next

The next hackathon sponsored by the ConvergeAccelerator will be held in Dallas June 6-8.