Finance gap is the difference between the working capital and the cash flow of the company. This credit squeeze has driven the need for an alternative source of financing.
In the recent past, especially after the 2008 financial crisis, the financial institutions have drastically reduced credit exposure to small and medium-sized businesses (SMEs) and individual borrowers. In general, banks aim to have greater credit exposure to its customers with the highest credit rating and less exposure to clients with a lower one.
This obviously leads to an unfavourable situation for the SMEs regarding credit rationing and finance gaps. Finance gap is the difference between the working capital and the cash flow of the company. This credit squeeze has driven the need for an alternative source of financing.
The lengthy and rigid procedures of financial institutions are being fast replaced by innovative lending and borrowing options in the form of P2P lending. Peer to Peer (P2P) lending platforms are emerging as the fastest growing sector in the financial services space.
As per industry reports, the global peer-to-peer market could be worth approximately 1 trillion US dollars by the year 2025, an astounding growth from approximately 60 billion USD in 2015. According to Morgan Stanley research, this upcoming market is anticipated to rise at a whopping CAGR [Compounded Annual Growth Rate] of 51% between 2016 and 2024.
While the growth forecasts for peer-to-peer lending are very promising, there are lots of hurdles that need to be overcome first. One of the major challengethat needs attention is to manage fraudulent activities and malpractices within the space, as they result in loss of investor confidence and trust.
Lendoit – A true Decentralized P2P Platform
Lendoit is building a smart contract-powered ecosystem on top of the Ethereumblockchain. which will connect borrowers and lenders from across the globe in a trusted, fast and easy manner, using the advantages of Smart Contracts and Blockchain technology.
Lendoit has developed a disruptive lending ecosystem, using its Smart Contracts that serve the following participants:
- Borrowers can apply for a loan using a Smart Loan Contract
- Lenders can lend to borrowers using the Smart Loan Contract, by transferring funds to the contract
- Reputation Consumers can get information about an Ethereum address via the unique Lendoit Smart Reputation Contract, for any purpose (e.g. checking address before transferring tokens to it, exchanging physical assets for tokens, etc.)
- Collectors can buy any debt in a tender using the Smart Loan Contract.
- The Collectors that can participate in the auction must be under applicable legal requirements and regulation in the relevant jurisdiction.
On Lendoit’s decentralized platform, the borrowers will be able to apply for loans using the smart loan contract while the lenders can lend funds by sending funds to the contract.
On the Lendoit platform, the contract stores the logic of the loan and acts an electronic immutable agreement. The contract is the trusted intermediary that is in charge of holding and releasing funds, updating reputation, secondary market interaction or compensation mechanisms in the case of defaulted loans.
Since the reputation contract runs on top of the system, users are able to build reputation.
To tackle the problem of repayment defaluts, Lendoit has created the Smart Compensatin Fund that would help the lender to cover his or her losses. Also, in case default arises, and the loan agreement is a legal binding contract, the Lendoit platform would sell the loan amount at a discounted price to debt collectors and repay the lender.
The Loan Token
The Lendoit Token, LOAN, is an ERC20-compliant token. The LOAN will always be liquid with reserve of Ether using the Smart Conversion Contract, but will be also listed in certain cryptocurrency exchanges as well. All the people interacting and participating in the Lendoit system, will have to use and make payments in LOAN tokens.
Lendoit Road Map
Lendoit is aiming to be the world leader in thefast growing P2P lending industry. Any company or platform that wants to be a leader in this sector, will have to provide fair access to its platform for good borrowers and lenders from all over the globe in a trusted, fast and easy-to-use manner.
Lendoit’s Alpha version is currently available, initially providing short-term loans only, which are to be returned in full all at once. Support for long term loans will be made available later in the roadmap as outlined below:
Token Name: LOAN, ERC20 Token
Token sale start date – 13th December 2017
Token sale end date – 13th January 2018
Youtube channel - https://goo.gl/UZss4G
Telegram - https://t.me/Lendoit
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