Our Solution: Two Paths to Capital
The Two-Path Trust System
Catalyst’s fundamental innovation is recognizing that trust can be constructed through multiple valid pathways. Traditional financial systems impose a single path: establish formal business registration, maintain audited books, accumulate transaction history over years, and pledge physical collateral. This gatekeeping mechanism excludes the majority of economic actors in emerging markets.
Catalyst instead implements two parallel trust-building pathways, each suited to different entrepreneur profiles and stages of business development.
Path 1: Performance Trust
Performance Trust targets SMEs with existing marketplace presence and transaction history. These businesses may operate informally or semi-formally, but they have demonstrated market validation through actual sales, customer relationships, and operational consistency.
The Performance Trust pathway integrates with e-commerce platforms, payment processors, and marketplace APIs to extract verifiable data about business operations. When an entrepreneur lists products on an integrated marketplace, every sale, customer review, delivery confirmation, and repeat purchase feeds into a reputation engine that quantifies reliability.
An entrepreneur running a fashion boutique on Instagram and WhatsApp can connect their business accounts, grant permission for data access, and immediately generate a preliminary trust score based on their existing transaction volume, customer testimonials, and order fulfillment rates.
Path 2: Human Trust
Human Trust addresses the challenge facing aspiring entrepreneurs who possess business plans, skills, and market opportunities but lack transaction history. A recent university graduate with fashion design training might have a compelling business plan for custom clothing but no existing sales to prove market demand.
The Human Trust pathway enables community members with established reputations to sponsor individuals they believe in, effectively providing “human collateral.” An Agent—perhaps a successful entrepreneur, community leader, or business mentor—can vouch for the aspiring entrepreneur after reviewing her skills, business plan, and character.
The Agent’s incentive structure aligns with careful selection. They receive 5% commission on profits generated by sponsored businesses, but only when those businesses succeed. If sponsored entrepreneurs default or fail, it impacts the Agent’s reputation score and reduces their capacity to sponsor others.
Unified Investment Marketplace
Both trust pathways feed into a shared investment marketplace where capital providers can browse funding opportunities, review trust metrics, and deploy capital. The marketplace presents opportunities in standardized format regardless of trust path.
Each funding opportunity displays:
- Requested amount and purpose
- Term length and profit-sharing percentage
- SME location and trust score breakdown
- Business history (sales data or sponsor profile)
- Planned use of funds
Multi-Currency Infrastructure
Investors can deploy capital across three currencies:
- Nigerian Naira (NGN) for domestic investors
- Cardano (ADA) for cryptocurrency holders
- USDM stablecoin for dollar-denominated exposure
The system handles currency conversion, exchange rate risk, and profit distribution automatically, removing technical barriers that might otherwise limit participation.
Why This Works
By replacing physical collateral with verifiable digital trust, Catalyst makes 40 million invisible MSMEs into a globally investible asset class. The dual-path system ensures both established businesses and aspiring entrepreneurs can access capital based on capability rather than inherited wealth.