Case #5: Direct lending to entrepreneurs
Anna Kulikova

There are a number of problems that you seem to be either confused about or just gloss over when comparing the Humaniq to Kiva.

First, Kiva does not have local branches. Kiva itself is not actually a P2P platform. They aggregate payments to field partners (which are typically microfinance institutions in developing countries) who in most cases have already issued a loan to the entrepreneur (i.e. funders on the Kiva platform don’t directly fund “their” entrepreneur but rather the institution who serves the entrepreneur).

Second, many countries have know-your-customer (KYC) requirements to issue loans and may mandate MFIs and other loan issuing organizations to register with banking or other financial authorities in the country. So I don’t understand why you suggest that Kiva issues loans without documentation.

Third, I don’t see how you can claim that Humaniq’s average interest rate will be 10%. Where do you get that information from? Is the Humaniq application designed to allow two people to contract freely? If so, average interest rates of 10% is not something that you can claim with any certainty.

Fourth, I don’t see how Humaniq will be able to make loans without any infrastructure on the ground. I don’t mean technically, which is of course possible, but my point relates more to enforcing repayment from borrowers. Repayment rates in microfinance are high (often between 92–98%) because loan officers are in frequent contact with their clients and pressure repayment through social collateral and public repayment of their loans.

Finally, I think you guys at Humaniq should probably account for volatility of the humaniq token when considering repayment. I assume you guys believe that Humaniq tokens will increase in value. If this is the case, nobody will want a loan denominated in hmq because it will increase the amount they will need to pay back (unless they transact solely in hmq for their economic transactions… which highly unlikely in rural economies where most people transact on a cash basis in local currency.

Best of luck with the project.

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