Crowd Genie is a peer-to-peer lending platform based in Singapore.
It connects small to medium businesses seeking loans with capital via a blockchain-based cryptocurrency system. Lenders obtain better rates than they would at a bank and borrowers receive better terms. Borrowers who otherwise might not get access to such loans, now have a place to turn. The company was granted regulatory approval in March 2017 by the Monetary Authority of Singapore. That said, Singapore is just their launch country. The team has their eye set on pan-Asian expansion.
How it works is simple; a borrower will be matched with lenders. Lenders can expect to make at least 14% return with all funds held in escrow. This peer to peer lending activities will be tokenized using smart contracts to enable lending without borders more efficient, cheaper and safer. Ultimately, the team has a vision to build an Asset Trading Exchange on Blockchain that will democratize trading and allow investment in infrastructure, stocks, cryptocurrency, and bonds across Asia, which would be prohibitively expensive, and potentially unfeasible due to issues of transparency and trust without Blockchain.
We recently sat down with Akshay Mehra, the CEO of Crowd Genie to have a chat with him about the project as well as finding out his thoughts and insights.
Hi, Akshay. Thanks for joining us today. Can you tell us more about yourself and Crowd Genie?
Hi Daniel, thanks for your invitation. Before founding Crowd Genie, I was the board advisor at Anchanto e-commerce, and previously the brand management head at P&G and Principal Consultant at Innosight. The reason why I created Crowd Genie is simple. I want to make borrowing faster, cheaper, and simpler compared to traditional financing methods. Crowdfunding is popular in the West, but the idea is relatively new in Singapore and other Asia countries. Observing how lenders getting low returns from the banks because of the overhead costs and how established SMEs unable to receive full funding desired and become under-banked, I would like to match this two parties together to solve the problem and that’s what Crowd Genie has been doing.
Why did you decide to use blockchain in building Crowd Genie?
Although our existing P2P digital loan business is incredibly innovative in the Singapore financial sector, it would have been impossible to scale to enable lending without borders and offer Asia-wide asset trading before blockchain technology was introduced.
To build and scale an asset exchange with pre-blockchain technologies would be prohibitively expensive, and potentially unfeasible due to issues of transparency and trust.
Was that your plan from the start or did you start the service and realize that this technology was the only way of scaling, particularly internationally?
Yes, my initial plan was to transform Crowd Genie into a regional lending platform where lenders from one country can lend to borrowers from another, not restricted by geography limitation. The introduction of Blockchain technology has made our vision more cost feasible and practical now.
Editors Pick: Crowd Genie ICO
The idea of lending without the middle-man has caught fire in cryptocurrency finance. The idea of being able to connect with lenders beyond traditional sources will be the next big “thing” in global business development. This ability is especially important for smaller businesses – many of who do not qualify
You are regulated by a government authority. Why did you take this step? How does this set you apart from other p2p platforms that are not regulated or licensed in some way?
As peer to peer lending platform involves enormous monetary transactions, a securities license is crucial for regulated lending activities. This gives confidence to our users that our operations processes are solid and approved by regulatory board, and there is no need to worry about illegal activities such as money laundering and terrorism financing on our platform because we have strict due diligence in place. Finally, as we are required to maintain minimum capital and have Escrow Agent who manages all funds, investors’ interest is well protected, as compared to other unregulated platforms.
In the whitepaper, you talk about creating “Asian Passport” rights or identities. Tell us how you came up with the idea and how you think you will implement this regionally. Is this based on the idea of European passport banking rights?
To build an end-to-end Asset Exchange, a Digital Passport is essential for us to identify who are the lenders and borrowers, are they associated with negative news, illegal activities or politically exposed. We will continue with our existing due diligence process where we ask for proof of identity and bank statement and check it against a world-wide recognized database. Thereafter we set up a digital passport and store in on blockchain.
Regulation-wise, how do you think your securities license will set you apart in other Asian countries you enter? Will you try to obtain securities licenses in every country you operate in?
Yes, part of the funds raised will be used to obtain securities licenses in other countries. We believe that being licensed by Monetary Authority of Singapore would make the application process easier, and our internal processes were already been reviewed and approved by one of the largest and most credible financial hub regulators.
Let’s talk about one of the features you want to offer called GenieShield – your default fund. How does this set you apart from other lenders in the space and how does this differ from traditional bank guarantees?
GenieShield is a provisional fund provided to help lenders in time of delayed repayment or default, by advancing funds from GenieShield to lenders while continuing with our debt collection effort, subject to the availability of fund. GenieShield is currently contributed by borrower fee. This is an additional initiative that we offer to protect investors’ interest. However, do note that this is not an insurance scheme and hence it’s not guaranteed that full expected repayments will be received in time of delay or default, but rest assured that our team will do our best in protecting investors’ capital.
Please explain the notion of “fractionalized assets,” and how it is redefining how P2P lending is occurring.
P2P lending is an illiquid investment. Imagine that you have invested in a 12 months tenure loan, but would like to get some money back before it matures, say 2 months later. You can do so by selling it on Crowd Genie Asset Exchange by indicating the fraction of your assets that you would like to sell.
What do you think is the biggest challenge or obstacle Crowd Genie will face? How do you plan to tackle that challenge?
I think the biggest challenge would be minimizing the default rate, even in time of economic downturn and financial crisis. To ensure this, we have meticulous credit underwriting, diversified borrower and personal guarantee profile, the introduction of GenieShield and experience debt collection agency partner in place.
That concludes our Interview with Akshay Mehra
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