HaveFund creates a synergy for money lenders around the world to provide loans with trust, with more ease coupled with a fresh competitiveness.
Non-bank financial institutions (NBFI) and other lending companies, are on an upward trajectory bolstered by opportunities to be found in a new economy boosted by funding needs. Despite recognized advantages compared to the organized all-in-one services offered by the conventional banking system, challenges are fierce.
However, these hurdles will soon be a chapter from the past. With the imminent launch of the platform HaveFund, these companies and institutions will be offered a way to converge their forces and to develop a new competitiveness in the financial landscape. To name only a few elements amongst the limitless possibilities, HaveFund is designed to improve the industry’s efficiency by providing a platform for lenders and creditors to interact between each other based on key features: trustful, safe, compliant, efficient and disruptive.
A fierce competition against banks
When it comes to financial needs, and especially when individuals are looking for funding, the first thought that comes into people’s mind is Bank. Yet, many of us can’t ensure a bank loan for multiple reasons: unstable career, existing debt, low income, spendings, etc. Under the name of Credit Scoring, the transformation of our society has made these variables even harder to please the banks, who use preset policies that have been tougher throughout the different economic crises.
While the financial system is dominated by these banks, Non-Banking lending institutions play an important role by providing a complementarity and competitive alternative. Taking the loans as example, these entities use a different method to create their customer profiles and their credit scorings thanks to their status of commercial entities compared to the banks, governed by Central Banks’ directives. By doing so, individuals or corporations are opened to new opportunities that were not possible from the traditional system.
NBFIs’ growth restricted by challenges
Despite representing an ideal alternative to banks, NBFIs are confronted with core challenges from internal weaknesses to exterior threats.
While NBFIs and lending companies provide loan with more flexibility, the counterparts are an impediment for potential creditors. In general, loans’ offered by NBFIs and other lenders are linked with higher interests (6–20%) compared to the banks’ (1–5%). This huge difference is set to maintain a certain risk-return level by having in mind that the borrowers are ineligible to banks funding services. That can be explained by the different financial systems that allow these entities to lend.
In one hand, banks invest by providing loans using the deposited cash from their clients under the fiduciary responsibility. In the same time, their large scope of financial products coupled with a huge amount of capital allow them to earn billions even with low-risk investments. On the other hand, commercial lenders are not allowed to create deposit accounts for their clients, and therefore, loans come directly from their own capital, limiting their investment opportunities. Even with such boundaries, their offered proved to answer emerging needs from all around the world.
The best alternative to banks?
From 2014 to 2018, the number of these institutions in Hong Kong rocketed up from 1,309 to 2,000+, answering a growing demand coming for personal mortgages and from property developers. In Japan, NBFIs were represented by more than 10,000+ companies prior 2008’s crisis before stabilizing at around 1,700. Nevertheless, they weight more than ¥23.51 trillion Japanese yen (or USD$ 220 billion) for the period of 2018.
These money lenders offer obvious privileges to individuals or companies by giving new calculations of one credit scoring. Being faster and more flexible, NBFIs get obvious privileges amongst people to get funded and their existence has become essential to fuel the economy.
A quest to information
As per their competitiveness compared to the traditional banking institutions, lenders are lone wolves on this huge and organized steppe that the financial landscape is composed of.
Banks have been lending for decades if not centuries, gathering the best practices and tools to collect creditors’ information in order to develop their credit scores such as credit card consumption data, bank account information, etc. For commercial lenders, this hunt for information comes with more difficulties since they are apart from the banking system, also synonym of more important costs.
Yet, a solution could open the doors to a new world where lenders become serious competitors against the Banks. Indeed, since the financial world nowadays is tied up with the collection of information, emerging these entities effort to collect data and gathering their resources to do so could allow them to get numerous advantages: lower interest rates for customers, faster customer profiles check, more competitiveness… Then why haven’t they started yet? Well, nobody gave them this chance… until today.
A bridge leading to opportunities and success
Planned to be launched in December this year, the platform HaveFund will serve as a trustful bridge between these NBFIs to collaborate staring at the same direction. Like a marketplace, HaveFund will give the opportunity for those entities and loan-seekers to meet. Entities will then be able to bid against each other with the objective to get the desired investments by offering attractive and tailor-made offers.
In order to do it, while maintaining a total opacity of customers’ privacy, HaveFund enables lenders to make calculations based on encrypted data to develop their offers and hence permits a high confidence for all parties to interact. Only once a bid is over, the platform unlock the loan-seeker’s information to be shared with the winner.
This optimal environment is only possible thanks to the use of a blockchain, technology that has shown undeniable assets, especially in the protection of privacy and information, to create automation or to lower financial costs.
Now into the home stretch of launching the platform,the team behind HaveFund is developing consumer loan and mortgage loan products for non-bank money lenders starting with the market of Japan and Hong Kong.
