After the successful completion of the pilot launched in July 2021, we are renewing our agreement and partnership with Boram Um. This will entail an increase in the volume of loans granted and the number of small producers eligible to join this partnership.
Today we would like to announce some excellent news. As you may recall, almost a year ago, we launched this first pilot in Brazil, to take our cheaper and more accessible financing tools beyond Mexico. By doing so, Brazil became the second country where we held a presence and Boram Um became the first external originator of EthicHub. A fantastic experience. We are very proud to say that the community of coffee growers led by Boram Um has fulfilled all its commitments in a timely manner and that, together, we have been able to demonstrate the success of collaborative ecosystems.
We are happy to announce that this reciprocal trust between Brazilian coffee growers and the ethichubbers - who have contributed to their financing - is renewed and expanded for the benefit of all. Thanks to you, we can put once more our trust in these hard-working people so that they can continue to enjoy a fairer manner of financing.
Would you like to directly support the coffee farmers of Boram Um? Well, now you can. As of today, the possibility of using EthicHub's token, $Ethix, to "endorse" the incorporation of all these people to our platform is open. Any Ethix holder has the opportunity to collateralize part of the loan requested by the small producers of Boram Um and receive a passive return in $Ethix for the risk assumed. Remember that according to the system built around the token, Boram Um and its farmers will deposit 20% of the total loan requested with Ethix.
Another 20% will be put up by EthicHub as auditor and the remaining 60% that we have to cover will be filled by all Ethix holders interested. Through this complex system, all the actors (farmers & Boram UM, EthicHub and the EthixHolders) provide security to all investors sending capital to finance our farmers’ projects.
There is always the compensation system should the 100% collateral not be enough to collateralize the loans. Although we have designed a robust system, resistant to defaults, it does not completely eliminate the possibility that we could lose our Ethix as collateral if this time Boram Um's projects are declared unpaid. So if you have any doubts or questions, please do not hesitate to contact us. But we are convinced that everything will work out just as well as in the pilot!