?Welcome to the third edition of the Z2E KommunityChronicles Newsletter ?

Dear Fellow Komune members,

In this issue, we will talk about Alternative Finance.?

In this issue, we explore Alternative Finance—new, creative ways for people to support each other financially, making it more accessible for everyone!?

Imagine opening a lemonade stand but lacking funds. Instead of going to a bank, you could crowdfund from friends and family. Crowdfunding differs from peer-to-peer lending, where you agree on repayment terms with a lender, bypassing the bank. Microloans offer small loans for those ineligible for traditional ones. Tokenization lets people invest in assets, like buying a fraction of a house.?

Our goal is to provide insights and inspire user-friendly, accessible financial products.

Let’s dive in!

? Look at the challenge stages and create something amazing!? Don’t forget to share it on your profile or the comment section with the hashtag #MakerChallengeZ2E3??

Money and numbers can feel intimidating to many people, but understanding your finances doesn't have to be! The first step to making sense of how money works is simply keeping track of it.

Your mission??

Build a simple money-tracking device so that you always have a count of how much is there in your wallet.?

? Challenge Stage 1: A simple coin sorting machine!

Materials Needed: Cardboard, glue, sketch pen, ruler, coins of different sizes

Objective: To make a simple sorting machine to count all the savings in your piggy bank.

How to Build this?

• Design the Machine: Plan out all the parts and craft them out using cardboard
• Make the Sorting Holes: Make different holes in your sorter, from smallest to largest, such that the coin can fall through the appropriate hole, segregated by size and weight.
• Assemble the Parts: Glue all the different parts together and watch the machine work like magic.

?Challenge Stage 2: Create a Smart Money Bank using Arduino!

Materials Needed: Arduino UNO or Nano, LCD Screen, Switches, Touch Sensor, IR Sensor, Wires, Power Bank

Objective: Using Arduino, create a smart money bank that lets you input your savings. You’ll see your total displayed on an LCD screen!

How to Build this?

• Connect the Circuit: Wire up the LCD Screen with the Arduino. Load the basic "Hello World" example from the LiquidCrystal library in the Arduino IDE to ensure the LCD is working correctly.
• Set Up the Sensors: Wire the IR sensor to detect if an object (like a coin or hand) passes through. Set it up to trigger the touch sensor that will simulate adding an amount to your savings based on the weight. Code the circuit to add every new input and display it on the LCD.
• Create a cardboard enclosure: Personalize the project by adding labels or decorations and get ready to test out your smart money bank!

Conclusion:?

These simple yet fun ways to help you track your expenses will not just help you track your money but build in a habit of saving as well!?

References:

1. https://interestingengineering.com/videos/coin-sorting-machine?
2. https://www.youtube.com/watch?v=6BF9copnfS4
3. https://shorturl.at/onDLw

Trust is the foundation of any finance-related product. Ensuring users feel secure starts long before the product takes shape. Financial user researchers observe how people manage money, track behaviors, and identify challenges. These insights help design trustworthy, user-friendly products. One-on-one interviews provide deeper understanding by exploring users' emotions, challenges, and motivations through in-depth conversations!

Your Mission:?

Conduct user research by talking to 5-10 people (ideally not your friends or family), that can help you build a financial solution for them; by? helping them manage their day-to-day expenses.?

Here are five types of questions you can ask during your research to help build that connection:?

1. Understand the Emotion:

“Can you tell me about a time when managing your finances stressed you out?? What happened to make you feel that way?”

2. Know the Pain and Gain Trade-Offs:?

“What’s the toughest part about saving money? And what keeps you going despite that? List three things you dislike about it and rank them!”

3. Find out what Creates Value :?

“Picture yourself successfully saving for something big. What steps did you take, and how did that feel when you finally got there?”

4. Observe the World from their Point-of-View:

“When you see someone else managing their money well, what do you notice? What do they do differently? How does their life look different?”

5. Imagine the Future Together:

“If in five years, financial stress was no longer an issue for you, how would that change your life and decision-making? Walk me through a day in this new reality!”

• Did you enjoy the activity??
• What were some of the common challenges shared??
• What did you enjoy most in the conversations??

?Share with us in the comment section!

References:

1. https://sites.google.com/site/hrishiparadailydiaries/home/financial-diaries?
2. https://d91labs.org/khata?

Let’s have a look at a few case studies to better understand alternative financing models; based on a variety of users’ scenarios & their requirements to help us design & implement our solutions better!?

?Equity Crowdfunding for Local Communities:

• User Scenario: A group of parents in a small town wants to build a playground. They use a crowdfunding platform to raise funds and give contributors a small ownership stake. If the playground earns money from events, backers share in the profits. This way, the parents not only get financial support but also form lasting relationships with their backers, who become part of the project’s success.
• Case Study: Platforms like Wefunder and Republic Europe allow individuals to invest in local projects in exchange for equity. This model gives contributors a financial stake in the outcome, fostering stronger community involvement and ownership.

? Using Alternative Data for Creditworthiness:

• User Scenario: Jane, a freelancer from a developing country, earns a steady income but has no formal credit history. Traditional banks deny her loans, but an AI-driven platform steps in. Instead of relying on credit scores, it assesses her mobile payments, rental history, and online purchases. Based on this alternative data, the platform offers her a microloan, allowing Jane to expand her freelance business with access to capital she couldn't get before.
• Case Study: Companies like Zest AI and Credit Karma are changing how creditworthiness is assessed. By using alternative data, they enable financial access for those often excluded from traditional banking—like freelancers and gig workers—providing opportunities for growth and financial independence.

?Decentralized Lending for Small Entrepreneurs:

• User Scenario: Maria, a small business owner, struggles to access traditional loans due to high interest rates and doesn't want to give up control by bringing in investors. She finds a blockchain-based lending platform that allows her to borrow directly from a global network of lenders at better rates. This decentralized model gives Maria the capital she needs to grow her business without losing equity or control.
• Case Study: Companies like Clearbanc and Lighter Capital offer funding based on future revenue instead of equity, letting businesses repay loans through a percentage of future income. Decentralized lending platforms, powered by blockchain, further enable entrepreneurs to access global funding while avoiding traditional banking limitations.

References:

1. https://journals.sagepub.com/doi/10.1177/14657503221086101?
2. https://communityround.com/case-studies/substack?
3. https://europe.republic.com/?
4. https://wefunder.com/wefunder?
5. https://shorturl.at/IB2pb
6. https://ianroop.design/work/credit-karma?
7. https://vsc.co/clearbanc/?
8. https://www.lightercapital.com/?

Are you curious and passionate about learning and building a career in and around alternative finance??

?Here are a few key roles to explore:

• Financial Inclusion Strategist?
• Alternative Investment Analyst
• Blockchain Finance Consultant

?Top College Programs to Check Out:

• MIT’s Sloan School (Blockchain and Finance)
• INSEAD - Fintech and Future Commerce?
• Stanford’s Financial Innovation Program

A Few Good Reads to help you get there :?

• "The Sharing Economy” by Arun Sundararajan
• "The Future of Finance" by Henri Arslanian
• "Collaborative Finance" by Alan Rosca
• "The Unbanking of America" by Lisa Servon

Are you already working in the finance space and have open opportunities that might benefit our Kommunity?

DM our group admins and we will be sure to spread the word across on our #OpportunityFridaysZ2E !

This month, we’re shining the spotlight on our alumnus Mimi, and her Constellations Ventures ! Check out her journey at constellation.my??

Listen to Mimi and learn from her insights from here

?Myth : Anyone who takes financial risks can become a successful entrepreneur.

False.?

As an entrepreneur, it's critical to manage financial risks with financial safety. Which is why a key trait of a successful entrepreneur is financial future forecasting (creating a financial growth plan for the future based on current market trends & potential). An important thing to note when creating this plan is to not stick to only the best case scenario but rather analyze different scenarios and potential outcomes and prepare contingency plans accordingly.

Financial growth plans can help manage risks in the following ways :?

• By forecasting revenues and expenses, entrepreneurs can evaluate the financial impact of different strategies like launching a new product or entering a new market.?
• Projections can highlight the potential cash flow shortages, allowing businesses to plan alternative strategies to secure the line of credit. In such situations, alternative financing can prove to be a quick and seamless option to acquire the capital! ?For instance, a revolving business line of credit could be a good option for covering your business's short-term needs, such as equipment purchases.
• Detailed projections help determine effective allocation of resources!

You can download this Newsletter in English from here

That’s it for this edition of Z2E Kommunity Chronicles! See you next time!