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Growing Financial Markets with Blockchain

The problem: An executive at a large bank wants to grow revenue by expanding the bank’s loan portfolio. In researching new markets, she learns from a World Bank study that 42% of Indian adults reported borrowing money in the prior year, but only 7% borrowed from banks or formal Lenders. Although she recognizes the potential of this massive and unserved market, she is limited by the bank’s need for documented credit histories and the difficulty of acquiring data on Borrowers in the informal sector. As she is all too aware, many family-run businesses and unregistered entities don’t have formal financial documentation to prove their creditworthiness.

Without a file at the credit bureau, a grocery store owner in an emerging market is invisible to the traditional lending system. However, he does use multiple digital services that collect vast amounts of financial data on him and his business. He may pay his mobile data and utilities bills via a mobile wallet, and he uses a mobile Point-of-Sale (PoS) device to accept customer’s debit cards. These transaction histories could support his creditworthiness to a lender, but most digital service providers don’t share data with financial institutions or credit bureaus. The grocery store owner has a profitable and growing business, which should prove that he is an ideal loan recipient. But when he needs funds for working capital or to expand his shop, his only option is a loan from family, friends, or neighborhood moneylenders.

LendLedger connects Lenders to unleveraged digital data to help bridge the $2.6 trillion lending gap between institutional lending capital and informal Borrowers. LendLedger brings together Borrowers, Data Providers (DPs), and Lenders in an open and secure global ecosystem built on blockchain technology. LendLedger envisions a lending market that is inclusive and profitable for all participants.

To view the rest of the whitepaper please click here.