Lending and borrowing are intrinsic aspects of the businesses and financial systems of the world. They are fundamental parts of the banking and financial services industry that are essential for the required liquidity and wealth distribution necessary for the sustenance of the economic environment.
Businesses, especially the Small and Medium scale Enterprises (SMEs) need funds to survive. But the risk of not meeting up with the obligations of loan repayment makes it somewhat difficult for banks to do business with them. In cases where there are possibilities of accessing such loan services, the requirements and procedures involved are often too tedious that beneficiaries are even discouraged ahead of time.
An improved loans system
Blockchain lending is a development that is growing in popularity and offering alternative and less stressful ways of acquiring loans quicker and more efficiently even at lower interest rates.
Lendoit is a decentralized peer-to-peer lending platform which connects borrowers and lenders from all over the world in a trusted, fast and easy manner using the advantages of Smart Contracts and Blockchain technology. Lendoit does not use Tokens as collaterals, instead, it combines efficient methods to mitigate the chances of lenders losing their money such as 3rd party professional scoring/verification local companies, smart compensation fund, syndicated loans and a collectors market where default debt can be sold.
By implementing blockchain technology, peer-to-peer lending increases the opportunities and exposes borrowers to a wider range of available lenders, and also eliminates a huge part of the running costs usually associated with traditional lending systems. This permits the relatively cheaper interest rates charged for borrowing.
An effective combination
Considering the relative anonymity of the decentralized blockchain environment, to protect lenders from the possibility of losing their investment and other associated risks, Lendoit offers a robust system which overlaps between blockchain technology and conventional verification systems. Therefore, prior to borrowing, intending borrowers are subjected to standard KYC verification during application, while other aspects of the loan acquisition and repayment processes are based on an Ethereum Smart Contract.
During repayment of a given loan, the borrower repays the funds including the interest to the Smart Loan Contract using his wallet, the lender can then withdraw the principal loan funds from the Smart Loan Contract, in the same lending currency. But the interest is received into the lender’s wallet in Lendoit Tokens (LOAN) after an automatic conversion using the Smart Conversion Contract, according to the current rate of the Smart Conversion Contract.
On the Lendoit platform, loans can be given in any of the ERC20 currencies, and the platform has developed a disruptive ecosystem while the platform benefits by charging a small fee from the Smart Loan Contract, paid in LOAN tokens, using the Smart Conversion Contract.
Live Bitcoin News does not endorse this publication, not any of its members are associated with it. Readers are recommended to research on their own before making any investments in any company.