LendLedger is a complete solution for acquiring loans for small-medium scale businesses that are deemed ineligible by banks or financiers for lack of credit history. LendLedger is sure financial history form digital service providers can be used to adequately proof the creditworthiness of a business.

Mr. Chuks Business and Welfare

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Mr. Chukwuemeka (Chuks as popularly known) is an owner of a thriving electronic sales shop in the city of Uyo located in Akwa Ibom state in Nigeria. Just like many of his brothers who are scattered all over the country, he learned this trade from his father (or better still, he inherited the business). He has improved the business beyond the expectation and imagination of his father (now retired) who taught him. He has incorporated the latest technology into the business especially in the aspect of payments. He uses Point of Sale (PoS) machine and mobile wallets from ABC to accept payments. He is strict when dealing with funds as he does not accept cash payments for some goods. He also uses his mobile wallet to pay utility bills, mobile top-up, salaries of his workers etc.

His Challenge- Money flow

He has a major challenge: many of his loyal customers are civil servants who do not usually pay him up front for the goods they buy from him. These customers can only pay at the end of the month or many times at the beginning of the month for that is when they receive their salary. These customers are loyal as they have proven reliable over the past years. Chuks’ business, in turn, is suffering for lack of funds, he has to wait until the end of the month when his customers will pay him before he can stock his shop and sometimes longer because of delays in payment of salary by the government.

This has grown so bad that his vision of expanding his business to other cities is becoming truncated not because he does not have the necessary qualities. He has enough workers, he has demand and his profits (in the hands of his customers as credits) is well enough to cater for the expansion. But the funds are not always readily available to do so. Sometimes he gets so lucky to be able to get goods from very few of his suppliers with whom he has established trust over the past. All He has now is to request for loans from banks.

His Solution- Loans? No thanks.

His business is not registered with CAC (Corporate Affairs Commission) since the business was inherited, how could a family business that has existed for ages have?.

He turned to banks and corporate bodies to acquire a loan for expansion and the free flow of cash in his established medium scale business. But to his surprise, the request of banks just broke the camel’s back. First, the bank representative wanted to know if Chuks is running a registered business but Nope, he isn’t. His business is not registered with CAC (Corporate Affairs Commission) since the business was inherited, how could a family business that has existed for ages have. Other documents requested are Tax documents or his credit history. He did not have tax history or credit history with the credit bureau of the country. This is because the suppliers who supplied him goods on credit never reported this actions to the credit bureau. These actions could be used to calculate his creditworthiness.

Microfinance?

He was referred to Microfinance Institutions (MFIs) which group businesses into groups but this was too long for him since the funds he needed, he needed them quickly. To get loans from MFIs he has to attend meetings and go through endless processes.

Finally, Families?

Finally, he has no other options than to turn to families and friends. They are reliable sources as they trust Chuks but he can’t access these sources as he would corporate bodies. He cannot get loans frequently because he needed loans from time-to-time in short notice.

The scenario painted above shows the ordeal of many small-medium scale business owners in many third world countries like India as third world countries cannot access loans.

LendLedger- To the rescue

LendLedger is sure that these data can be used to adequately proof the creditworthiness of a business.

LendLedger is a complete solution for acquiring loans for small-medium scale businesses that are deemed ineligible by banks or financiers for lack of credit history. LendLedger sees a very big opportunity for these businesses to prove their creditworthiness. Many of these businesses use digital services from day-to-day as these digital services are important to the thriving of their businesses. Many such as Mr. Chuks in the scenario above use these digital services to:

• Send funds to their suppliers
• Receive funds from their customers
• Pay their worker’s salaries
• Pay utility bills
• Do mobile subscriptions or top up mobile phones

These transactions are recorded by the digital service providers such as ABC in the scenario above. LendLedger is sure that these data can be used to adequately proof the creditworthiness of a business. But such data are not available to the lenders to prove that their business is thriving and they can be trusted. Because there is no trust between these providers and the appropriate financial institution or body to provide loan or credit. LendLedger comes into the scene to bridge the gap of trust between the service providers and appropriate financier to provide loans.

LengLedger is built on the blockchain ecosystem (stellar) to ensure seamless interaction and transfer of financial history between all participating bodies. The blockchain technology will ensure the security of each borrower’s financial history. LendLeder is not a financier or a lender, it is only a platform to bridge the existing gaps between the lender, the borrower, the service provider, and other participating parties.

 Platform Participants (How the Platform works)

1.      Borrower

Anyone can register on the LendLedger platform. Through the LendLedger platform, a borrower has access to his financial history, provided by the service provider (who is paid for the service by the lender). The financial history can be shared with any lender of his choice on the platform when he applies for a loan. The financial data or history is encrypted by the technology on the platform so it remains secure and accessible to the borrower and the lender that is interacting.

2.      Lender

The lender can easily request for the financial data of the borrower. The credit scorer on the platform uses the data to calculate the credit score or creditworthiness of the borrower. The lender do not have to worry about trust as the platform through it adequate technology operates on trustlessness.

3.      The Service Provider

The service provider on the platform does not have to worry about keeping their client’s (the borrower) data secure as the platform encrypts financial data sent through it. The service providers are also incentivized with the platform token (LOAN) for the data they provide.

4.      The Credit Scorer

The credit scorer uses the financial of the borrower data provided by the service provider (Data providers –DPs) to calculate the creditworthiness or credit score of the borrower.

Other Features of LendLedger

The lender creates the Smart contract with the terms of agreements…

There is a reputation score on the platform to rate all platform participants based on their previous transactions and interactions. The borrower gets a higher reputation score when he/she repays loans timely. There is a smart contract feature on the platform which ensures the repayment of loans acquired. The lender creates the Smart contract with the terms of agreements and other important clauses, the smart contract is funded with platform digital asset (LOAN) and it is deployed on the blockchain where it is tamper proof. The smart contract enforces the loan repayment.

Token Details

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Conclusion- Mr. Chuks

Chuks can now be rest assured of having a credit history with his financial data or history kept safe at ABC his service provider. He can have access to loan from any lender of his choice on the LendLedger platform as fast as possible and as frequent as possible to expand his family business.

For further information on LendLedger, you can Visit:

Website | Whitepaper | Telegram | Twitter

Thanks for reading. I am @ayobami99. You can also reach me on bitcointalk and blog for more exciting contents on the blockchain technology.

Disclaimer!: This article is created to showcase or promote the technological innovations on the blockchain ecosystem, it should not be seen as a financial advice. you should do your research well or consult your financial advisor for such.