Loans are happening everywhere, from small interpersonal loans to creditors allowing for extended debt repayments to regular debtors — think of business vendors and clients. Due to personal relationships for small interpersonal cash loans and factors such as lack of written repayment terms for business relationships, loans have a low percentage of repayment in general, while subjected to the industry.
Receivables market is an investment opportunity
When a loan takes place, from an IOU to a loan agreement, has been put in place, and the debtor fails to make (installment) payments as agreed for over 90 days, it becomes a Non-Performing Loan (NPL). In a traditional market, NPLs would be available for trading and liquidation through a bond market. However, it would take a lot of time, due to legal procedures, and creditors tend to have to bear financial losses, due to selling the entire receivable (NPL) at a discounted price against its value. Besides this, debt collection agencies charge a high fee of up to 50% of collected fees and this is another deterrent for creditors to ensure debt repayment.
Peer-to-peer (P2P) lending, are small interpersonal loans made to acquaintances or family, ends up with difficulties in getting debt repayments due to personal relationships. NPLs and P2P are both categorised as receivables.
In situations where creditors are in need of cash, they would sell their receivables to other willing creditors at a discounted price of the actual loan value to raise funds. This causes initial creditors to bear unnecessary financial losses due to delayed or unfulfilled debt repayment. However, with the right collection system, the receivables could stand to be very profitable to secondary creditors who have taken on the loan, which is also the incentives of creditors to buy these receivables at a discounted price.
Difficult for individuals to access receivables market
Although it could be very profitable for creditors, the traditional ways of legalising a receivable transfer take a long time due to its processes. As P2P loans are usually done between acquaintances, there is usually a lack of documentation or agreement between both parties, which makes the loan unrecognised in the eyes of law.
Due to the above reasons, initially profitable NPL or peer-to-peer (P2P) lending market becomes unproductive and individuals are unable to access this market easily. The inaccessibility for regular investors or creditors, such as everyday people, makes this a lost opportunity for investments. The receivables market is also not commonly known as an investment opportunity due to the lack of awareness and education.
This is exactly where Reditus comes in.
End-to-end platform for individuals to benefit from this market
Tokenised receivables
Reditus is an end-to-end platform which enables the tokenisation of receivables and facilitates the trade and liquidation of these receivables. Using blockchain technology, it eliminates the problems faced in traditional markets such as cumbersome legal procedures of receivable transfers and entrustment of collected receivables.
Receivables Management System (RMS)
By providing a trusted and efficient platform for receivables, Reditus is providing a digitised platform for an easy yet secure access for individuals to benefit from the receivables markets. Creditors are able to register their receivables in the Reditus Receivables Management System (RMS) which will help to facilitate the tokenisation process of their receivables upon registration and approval.
Collection of debt repayments
With the system in place, Reditus also facilitates the collection process through its collection system which will help to accelerate debt repayments. This is a major feature for any receivables platform as the entire success of this ecosystem is highly dependent on its collection’s success rate.
The solution to traditional debt collection landscape
As today’s world evolves with the advancement of technology, optimisation, transparency and efficiency are keywords in facilitating any productive and profitable markets. There is no difference in the receivables market. Besides tedious processes for the trading of NPLs, high fees charged by existing debt collection agencies will no longer be a deterrent to the success of debt repayments to creditors. The RMS and Reditus platform provides a smart, technologically advanced and efficient collection system which is the need for today’s society.
With Reditus, we are the disruptive platform to the receivables market that people need today. Technological advancement has allowed us to improve existing businesses and ecosystems and with our expertise in debt collection, we are confident in the sustenance of this ecosystem.
