For billions of people and enterprises, local lending markets are inefficient and under-developed. Often, this is because Lenders, Borrowers, data sources, and other service providers are not well connected -- they cannot easily find each other, exchange information and transact freely.
The potential of verified business data
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.
The LendLedger Open API suite enables the LendLedger network to function in an open yet secure way. The protocol defines how data is sent between participants, and how loans are recorded on the blockchain.
A decentralized, standards-driven approach is more likely to reduce loan origination costs and massively scale up lending volumes. It unlocks more sources and volumes of credit data, and it facilitates many more commercial interactions among market participants. Decentralized models achieve more trust among participants, more efficient business interactions, more openness to diverse participants, and more innovation in how players interact.
This video explains how connecting untapped Data Contributors with Lenders through an open network can help solve the global, multi-trillion dollar credit deficit that small businesses face.