Crowdvouching is an interesting new concept being pioneered by Suretly, a New York-based financing start-up. The initiative being termed as ‘Tinder for microloans’, lets people ‘swipe right or left’ on stranger’s photographs in order to decide whether to give them a loan or not.
In other words, crowdvouching model works in collaboration with microfinancing organizations where all the investors are able to vouch for the borrowers by offering assurance to repay a part of the lending amount in case of default.
The decision to lend money is made on the basis of a form outlining the borrower’s financial history. Users share the risks, and depending on whether the individual returns the money or not, they can lose or earn from $1 to $10.
The default rate also decreases with an increase in accountability. As noted by Eugene Lobachev, Suretly’s founder, the default rate on Suretly is 2-3 percent lower than the market average.
The term crowdvouching was coined by Eugene Lobachev and Suretly is the first crowdvouching platform enabling people to trade micro “suretyship”, the agreements involving a promise by one party to accept the responsibility for the loan obligation of the borrower.
Suretly primarily targets short term loans of up to one month, and has been designed to cater all borrowers, including the ones with poor credit rating. Therefore, allowing borrowers to improve a poor credit history, making it possible for them to return to bank products with low rates in the future. While, being an alternative investment vehicle for the guarantor, and a chance to increase lending volumes for the creditors.
The Suretly application is already launched in Russia. It is available for download in Apple Store and Google Play. It is scheduled to be launched in Kazakhstan by the end of second quarter, 2017, and will be launched in the USA during the third quarter, 2017.
The investors interested in crowdvouching platforms are eagerly waiting for Suretly’s pre-ICO crowdsale scheduled for July, 2017. With this ICO, the company appears to be fully prepared to disrupt the P2P lending market.
The ICO in July will be offering 15 percent of the total shares and is aimed at raising between $1.5 – $8 million USD. The raised funds will be used to enter new countries and markets, spearheaded by a soon to be established legal entity in Singapore that would also act like an official shareholder and crowdfund initiator.