Lendoit Review: MicroLoans By The People For The People.

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Interview with Ori Erez Lendoit CEO

What does Lendoit do?

Lendoit connects borrowers and lenders from all over the world in a trusted, fast and easy way.

What are the three main advantages for borrowers using Lendoit?

Borrowers can get better interest rates then they can ever get in their local environment using the regular lending methods.

Lendoit gives borrowers the ability to connect someone from Japan where the interest is normally around 1% and another from Brazil where the interest is about 67%, allows us to find the sweet spot that makes the loan far more attractive than the alternatives for both parties.

The second major advantage is that unlike other projects in the field Lendoit is the only one not asking for collateral in order for one the get a loan. Many projects in the blockchain lending industry mistakenly try to imitate the banking system of a loan asking the borrowers for some guarantees in the likes of bitcoin or other currencies. We believe that this approach is utterly wrong. Why would someone need to borrow money if he holds a liquid asset such as Bitcoin that he can easily redeem on the market? the only way this would make sense is to use a non-liquid asset as a collateral as the banks do in the mortgage space. Using special compensation system and infrastructure we were able to find a smart and effective method to both protect against default loans and also avoid the need for the borrower to use collateral in order to apply for a loan.

The third major advantage of Lendoit will be the fact it is using the blockchain and smart tenders interest system that enable syndicated loans to get filled quickly, mitigating the risk of default loans by spreading the loan over several borrowers and also setting an average rate of interest which helps the offered loan get filled quickly.

Who are the target borrowers, SMEs or individuals?

All of them! The beautiful thing about the blockchain is that it enables everyone to take part in a seamless transparent way. Using a well reputable score providers from the “old fashion” industry each borrower will get a score recommending the expected loan amount it can afford it redemption. while the score is about to change from on individual or SME to another, all are welcome and expected to use the platform.

Will loans be issued in both crypto and fiat, what cryptos will be accepted on the platform?

All loans on the platform will be issued only in crypto currencies in order for us to use the many amazing advantages of the blockchain for monetary purposes.

First the platform will integrate only with the Ethereum blockchain mainly because it is the easiest thing to do. Soon after we will integrate will all big blockchains out there as well.

Will there be an option for crypto loans to be begged to a fiat currency at launch?

Although this is not our attention at the first production stage we have played with the idea of making several loan methods where some include a hedging mechanism to deal with the high volatility of crypto currencies. In a different note, one of the other blockchains I mentioned before will also be USDT solving the volatility issue by using a very steady crypto currency as the loan principle.

What are the three main advantages for lenders?

So, first and most obvious is the fact that the interest rates they will get will be far more meaningful than other investment opportunities in any other local lending industry.
The second will be that unlike the borrowers in the platform the lenders will stay absolutely anonymous for the entire process, avoiding revealing their identities.
The third big advantage the lenders will enjoy will be the syndicated loans process and the spreading of the loan amount over several borrowers which will dramatically reduce the chances of defaults loans.

Will Lendoit have an auto investing feature for lenders?

Well this will be done by using our marketplace where each lender will be able to chose his desired interest, his desired borrowers risk level any other important parameters we are currently working on. So those chosen parameters will automatize the process.

How will defaulted loans be processed?

Ohhhhh….this one is for all the marbles….:), well default loans is the core problem of every business in the field and we believe we found the perfect solution for mitigating that risk as much as possible. leaving behind the heavy burden of collateral from the borrowers we had to find an extensive mechanism to compensate for that and here it is in a nut shell:

  1. First we believe that the best way to deal with default loans is to do the best avoiding them in the first place. So by using well known “real” world score providers to asses the borrower’s ability to redeem the loan and uploading that so called score tor Reputation to the blockchain with the fact we are using syndicated loan system the divide the loan amount by several borrowers, adding to that the fact that the borrower fills a loan application that serves as a valid contract, we are able to dramatically reduce the default ates in the first place.
  2. After a loan is initiated, certain amount of the principle will be deposited in a special compensation fund to be used as an insurance pool.
    In case a default loan takes place, the lender will be partially compensated from the compensation fund.
  3. The loan contract will be then sold to local official and regulated debt collectors in the country of residence of the borrower, recovering the loan amount in a certain discount (depending on that country standards also calculated in first place by the score provider). The two recovering methods combined will assure a full refund for the lender’s money.

How will the reserve fund work in practice?

The reserve fund has a very important role in the platform. After each loan is redeemed, the lender will receive its principle amount in the original lended currency. The interest paid by the borrower also in the same currency will be then sent to the reserve pool where it will be traded into Lendoit’s LOAN tokens. Doing so will increase to value of our internal token and the reserve will basically be used as an internal exchange “Bancor” style. This is basically what runs the Lendoit system as lenders will have to have a proportionate LOAN tokens in their account in order to give loans in the first place.
What are the fees for the borrower and lender to use Lendoit?
Lendoit’s fees will derive from small fraction of each loan interest payed with LOAN tokens.

Would you like to add further information?

Yes please, As this is quite complex industry to say the least, I would to invite all of you to join our Telegram group at https://t.me/Lendoit, Where we have already hundreds of supporters asking questions and engaging conversation on our great vision.
We are heading towards our TGE to be held on December 2017 (Specific dates will be delivered soon) until than you are more welcome to find some info about us on out media channels and site at : https://lendoit.com/

We thank Ori Erez for the interview

 

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