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
FintruX – Disrupting P2P Lending and Unsecured Loans on the Blockchain
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.
