Online, peer-to-peer lending is being fundamentally disrupted by blockchain technology. The ability to verify assets, payments, credit, and identity is allowing mobile, fast-moving startups to offer better alternatives for borrowers and a unique opportunity for higher returns for investors.
FintruX is an established online lending platform that is introducing blockchain into its financial network to better serve both kinds of customers. The loan platform connects parties, allows them to verify information and set up loans between individuals or small entities in a fast, convenient, and lower risk environment.
Here is how it works. A small business owner seeking a loan will be able to, once verified by the system, shop for the best loans and repayment schedules amongst a group of lenders she can also seek information on. Once the loan is approved, the borrower will be rewarded for timely payments throughout the life of the loan, once the amount is paid back. All transactions are performed with the use of a single system token.
We recently sat down with Nelson Lin, the founder of FintruX to have a chat with him about the project as well as finding out their thoughts and insights.
Nelson. Thanks for joining us today. Can you tell us more about yourself and FintruX?
I am the founder and CEO of FintruX and also Robocoder. Robocoder provides the technology behind Fintrux. I am a veteran in the financial services software industry and have been building enterprise-level, mission-critical software for more than 30 years. This software includes Credit-Link (automated credit adjudication & lease origination), Market-Link (data-mart & pivot tables), LOIS (end-of-lease management, collection & accounting), Fast-Credit, CALMS (a web-based version of all the above), and FASS (fully automated securitization system).
FintruX is a global peer-to-peer (P2P) lending platform on the Ethereum blockchain network for providing unsecured loans. It connects small businesses who need money for cash flow issues, with lenders who want to earn a better return on their money. FintruX has many technological and strategic innovations including “credit enhancements” that has been a “secret sauce” in the securitization market to reduce the lending risk for lenders. On the technology side, our “no-code software generation and instant deployment” has proven to be successful in delivering robust, fast, and easy-to-use software, with extremely low maintenance.
In some ways, tokenized P2P lending platforms is a “killer app” for the blockchain technology. We are pretty sure you would agree, but can you elaborate and in the context of what you are trying to do.
Yes, certainly. All the current monetary transactions require too many intermediaries to facilitate a simple transaction from end-to-end and the process itself is also inefficient and time-consuming. Furthermore, most of the systems are fragmented, inconsistent and usually require extensive human intervention. Finally, such transactions require numerous touch-points to handle and manage the “trust” between all of the parties involved. Our mission is to make trustless financing a no-brainer for both borrower and lender.
All of these factors make for an ideal use-case that can be handled by a tokenized P2P lending platform that removes the unnecessary bureaucracy, saves time, and dramatically reduces the manual labor involved, making it a trusting platform. Our vision is to facilitate a global ecosystem where financing liquidity is maximized and every participant wins.
How did you come up with the idea and what was the thought process behind it?
The idea has been in development through thirty (30) years of experience in the financing software market. Along with my team at Robocoder, I have had the opportunity to serve the Canadian pass-through securitization industry for the last 20 years and have built robust software worthy enough to capture 90% of that market. Through numerous lessons, learning, research and solving problems for the banks, accredited investors, and large financial organizations to do bulk lending, we’ve found a way to automate it and apply to smaller individual loans. Thus, it would be possible to apply it to the masses where we can help small/medium enterprises and startup businesses.
What is the biggest problem within the industry or do you think there is a gap in the market for FintruX to fill?
The biggest problem is that small and startup businesses do not have sufficient credit history or access to capital for their short-term cash flow needs. Furthermore, the traditional systems are inadequate, fragmented, inconsistent, labor intensive and involve lots of intermediaries. There are many P2P lending platforms in existence but they do not talk to each other. It is not surprising that their lending practice can be inconsistent and borrowers ended up borrowing more than they can afford from multiple sources. What we need is an ecosystem, one that can facilitate the cooperation of as many partners as possible to have a collective intelligence. They should be sharing non-confidential deep learning information to prevent over-borrowing, to instill consistent credit practices, and to enjoy low-risk lending. FintruX is not only well positioned to serve the businesses that are underserved but also address these marketplace lending deficiencies by way of an ecosystem.
What do you think is the biggest problem FintruX will solve and why is the problem important to solve?
We are making simple unsecured loan highly secured so unexpected cash flow liquidity issues can be resolved in minutes.
Why did you choose to use Ethereum as your blockchain of choice?
Ethereum is the first and most mature blockchain network that can offer smart contract functionality that FintruX needs. Our no-code development technology is future-proof. If in future, we find one or more smart contract blockchain networks that are better suited for certain tasks, we can generate and deploy the same system to work on multiple networks and have them integrated with each other.
In the whitepaper, you talk about the reasons for the disconnect in the borrowing and lending market quite a bit. Do you see the growth of cryptocurrency in general after the 2008 economic meltdown as a way to respond to the general lack of trust in the system (on top of the other massive problems like lack of loan transparency)? How do you intend to address such issues? Performance record?
It is all about transparency. The meltdown in 2008 was due to rating agencies mistakenly gave unrealistic ratings to unworthy mortgages multiplied via derivatives. Fintrux, on the other hand, is an open ecosystem, with transparent and decentralized reputation ratings on an immutable blockchain. While blockchain can address the trust issues, cryptocurrencies can address the inefficiencies in the financial system. Token as a transaction fee, smart contract as a legal document, many systems as a platform architecture, no-code development and instant deployment are all advantages that set FintruX apart. These should address a lot of these trust issues and resolve the inherent inefficiencies in the current financial system.
Editors Pick: FintruX ICO
Blockchain-backed financial services start-ups are still finding new ways to provide products and opportunities including loans to those unable to access these services before. Beyond the other creative applications, it is being applied to, blockchain is at heart, a technology that is all about currency. That includes the financial kind.
Regulation-wise, what are the toughest challenges you will have to overcome? And from where?
Every country is different when it comes to regulation. Fintrux is destined to have a global presence. Since we are not lending our own money, the lenders should have their licenses to lend in their own countries. The toughest challenge should be surrounding the governance of cross-border lending and ensuring following the rules and regulations of each and every country. We will address these regulation challenges via a team of well-informed advisors and lawyers from all over the world and work with experienced local partners.
What are the services you plan to offer that excite you the most?
The most exciting value proposition and service that we plan to offer are to grow the global economy, provide liquidity to small business in their time of need and offer returns and opportunities to lenders/investors that never existed before Fintrux. Our proposition is to make it easy for small businesses to quickly secure affordable loans with no collateral, in any currency.
What has been your happiest moment so far working on FintruX?
The happiest moment so far was meeting with potential clients and partners who are so excited about our product/service/technology offering that they attended every single event of ours and ultimately participated in our crowdfunding events. That is trust and we will do our utmost to continuously earn it.
On the flipside, what has been the most painful, or perhaps the most regretful decision you’ve made with FintruX?
The most painful process I have to say was working through the regulatory compliance and having to meet with lawyers numerous times to continually clarify the changing landscape that does not have a clear guideline.
What is the indicator you are looking for to tell you that you have begun to achieve your mission?
We will know for sure we have begun to achieve our mission when through our ecosystem:
- our borrowers can borrow 4 – 6 digits in minutes
- lenders can earn better than industry returns
- partners can generate reasonable service fees for their effort
Tell us more about the FTX token.
FTX tokens are the means through which this platform will operate effectively and efficiently. The tokens will be used to pay for all of the fees associated with the setup and maintenance of the loans. Many service agencies are still charging an upfront licensing fee, annual maintenance fee, and hourly customization fee. FintruX Network will convince them to charge our lenders by the transaction, in FTX tokens. This simplifies the onboarding experience by removing the barrier to entry.
What are the selling points and what do both do in the system?
There are numerous benefits to the borrower and also to the lenders:
- Benefits to Borrowers:
Access to Affordable Credit, Superior Borrowing Experience, Branding Opportunity, Transparency and Fairness, Lowered Transaction Fee, Super-Fast and Efficient Funding and Self-Service options. And best of all, our decentralized reputation ratings on lenders ensure borrowers are protected from scary “loan sharks”
- Benefits to Lenders:
Access to Risk-Reduced Investing, Superior Lending Experience, Branding Opportunity, Access to a Network of Expertise, Attractive Returns, No Upfront Cost to Lenders, and More Satisfied Customers. And most of all, having the ability to make informed decision on lending to make above industry average returns
What do you think is the biggest challenge or obstacle FTX will face? How do you plan to tackle that challenge?
With the exception of the collateralization pools and currency being financed, inside the FintruX Network, everything is tokenized. Agencies, guarantors, and FintruX Network are all being paid in FTX Token. Rewards and late charges to borrowers are paid in FTX Token as well. FintruX will continuously sell collected tokens back to the participants to finance the operation and provide liquidity. The challenge would be to maintain a healthy token economy for the limited supply of FTX Token.
Moving on to more personal stuff, what does a typical day in your life look like?
Typical day in my life looks like an amazing juggling act and every day is a rewarding experience. From making great technical development progress to traveling long distance to meet with various stakeholders to keep up with marketing and hiring efforts, it is all a good mix of juggling various tasks and setting up routines and schedule to ensure productive progress. In the back of my mind I also keep thinking: how do we prevent undesirable behaviors from borrowers on Fintrux? I have the high hope that all borrowers have the opportunity to pay back what they owe while solving their immediate cash-flow needs.
Can you express one personal opinion of yours about the blockchain? It doesn’t matter if it’s negative or positive, we just want to hear your thoughts on it.
Change has never been this fast before, and should never be this slow again.
What’s something that you believed to be true for a long time until you found out that you were wrong, or if you don’t like that dichotomy of right versus wrong, what’s something significant that you really changed your mind about over time?
Mark Twain once said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”. So true. I have spent my life trying to come up with the results before telling people about it; I have spent my life trying to come up with products before talking about it. Bootstrapping is good but not great. The ICO has opened my eyes – a great process raising capital through the token sale and creating a token economy marketplace. I see a whole new opportunity to build great products to serve the global economy.
Finally, what other personal goals (besides your career) do you have in life? Is there anything else in life you want to achieve?
My career goal is mirrored in my personal goal which is to bring innovative technology to help people save time, including myself. FintruX is built upon a time-saving no-code development platform built by Robocoder called Rintagi. This is not only my career goal but also my personal goal to bring this open source platform to the masses. This platform enables instant software generation and deployment without having to do any coding. It is also future-proof because it can change itself. This is my dream – to simply save time – cause we can never find enough of that on earth.
That concludes our Interview with Nelson Lin
We’ll be scheduling even more exclusive interviews like this in the coming weeks to delve into the minds of what makes a blockchain startup tick as well asking the questions you want to know the most.
To make sure you don’t miss out on our exclusive interviews, go ahead and sign-up to our mailing list and subscribe to our social media channels.
Get in touch to let us know who you want us to interview as well as the questions you want us to ask.
You’ll get notifications on the latest exclusive articles as soon as they appear on our website – we won’t and will never spam you.