LendLedger CEO Speaks to Mike Finch for ICO Alert Podcast #41
LendLedger CEO Gautam Ivatury was excited to speak with Mike Finch, Co-founder and COO of ICO Alert for the 41st ICO Alert Podcast.
Here’s a recap in case you missed it!
Solving the $8 trillion credit gap through blockchain
Despite owning thriving businesses, over 200 million micro, small, and medium-sized enterprises lack the credit history they need to access loans from banks and financial institutions. Altogether these businesses are going without $8 trillion in financing, limiting their growth and flexibility.
Having co-founded a successful Indian lending business, Happy Loans, which is now disbursing about $100,00 in total to several hundred businesses every day, Gautam thought of ways to bring this solution to other markets. “Are we going to build it [data-driven lending for small businesses] in a way that’s scalable and global using blockchain and an open network? Or are we going to do it company by company, country by country, like we’ve already done it in India?”
Speaking to ICO Alert, Gautam explained that blockchain makes it possible to solve this global issue at scale by eliminating the need for intermediaries in every market. His ultimate answer was, “Why start another one of these [Happy Loans] when we can make this operation global using blockchain?” With more and more relevant credit data on small businesses becoming available every day across emerging and developed economies, the answer seemed obvious.
Using blockchain for impact today, not tomorrow
With a focus on emerging markets, Gautam wanted to build a solution that would be immediately accessible to millions of business owners. Integral to the LendLedger platform is that both Borrowers and Lenders transact in their local currency, not crypto. The goal is that “the borrower doesn’t even know that they’re using LendLedger”. Given the way the LendLedger platform is designed, “the borrower doesn’t even need to know that it’s got blockchain or crypto in the background.” This approach substantially lowers barriers to adoption, unlocking opportunities for impact at an unprecedented scale.
Creating larger social trust
At the heart of today’s constrained financial system is a lack of trust. Financial institutions are unable to trust the creditworthiness of businesses, and thus unable to extend them a loan. Key to LendLedger’s mission is to “use the trustless system of a blockchain-based ledger to create larger social trust”.
The LendLedger platform lets Lenders, Borrowers, and Data Providers build up reputations. The platform records an immutable history of the conduct of every party. So whilst making repayments, for instance, a small business borrower strengthens its creditworthiness in real time. Thus LendLedger does more than just unlock capital for growth, it also helps borrowers gradually increase the trust lenders can place in them, and reduce their borrowing costs. For those that are currently reliant on “informal” borrowing, LendLedger reduces that heavy burden (imposing on family members or turning to moneylenders charging exorbitant interest rates).
What’s next for LendLedger?
When asked about LendLedger’s roadmap, Gautam explained that the network would first help power Happy Loans’ existing lending business by the end of 2018. Meanwhile, there are already potential users interested in other emerging markets such as Myanmar and Kenya. Working with Stellar, itself striving to promote global financial access, literacy, and inclusion, there’s a huge opportunity not only for LendLedger, but for the positive multiplier effect that timely credit can have on small businesses.
