What is a Credit Network?
A credit network is a connected group of people or organisations or both, who have come together to support its members with finance for the purpose of savings, investments, business or growth. The group is governed by a set of rules which are mutually decided by the group members depending on their capacity and requirements. More often than not, this credit network fills the gap left by the banks in terms of service and accessibility.
For instance, a group of 15 small investors investing 1,000,000 at the time of formation of the group and creating a 15,000,000 fund to support member businesses in exchange for periodic returns or equity is also a credit network.
Another credit network could be a group consisting of seed vendors, farming equipment vendors, large scale farmers coming together to loan some money to small farmers for harvesting their crops for the season.
A supply-chain too, in effect, is a credit network. In supply-chains, manufacturers sell to distributors on credit, who in turn sell to retailers on credit. If idle-funds are available, they are put to use by negotiating discounts.
What is Swarm AI?
In AI, the research field inspired by the collective behaviour in natural cultures, such as the movement of birds and fish, is called Swarm AI. Swarming allows animals to solve problems that single individuals would find difficult or impossible to solve. With swarming, groups can catch larger prey more easily or better protect themselves from environmental threats, as compared to individuals. Sardines, for example, congregate when they are threatened. Because lone individuals are more likely to be eaten than individuals in large groups, this instinctual behaviour serves as a defence mechanism. Sardine bait balls can range in size from 10–20 metres in diameter and extend to a depth of 10 metres.
Swarm AI research seeks to leverage the problem solving skill of swarms to address problems that humans find difficult to tackle individually and that require coordinated action, such as governance, climate action and economic crises..
Swarm AI for Credit Networks
As we all understand, sharing money between a large number of people becomes increasingly difficult as the group gets larger and people know each other less, even if they are from the same group and have similar incentives.
For example: How can a new person be introduced into a network without putting everyone at risk? How can the group agree on what are acceptable risks and worthwhile rewards, like allowing new kinds of loans? And if they do, how can the risk and the reward of it be distributed and shared in the whole network?
At Arboreum, our model allows existing network members to act as a buffer when including new members. We also built a negotiation-protocol that allows instant decision making without centralized control thereby spreading risks & rewards throughout the network. We are applying swarm algorithms to help credit networks grow beyond their local community in a resilient and sustainable manner.
As we root in and branch out, we stand tall to give credit to the people.
