We are constantly borrowing money from our friends or lending money to them. While some people might do this once every few years, others are doing it every month or even every week.
That said, while the essence of debt relations may be more or less clear, there are no commonly accepted social norms or rules of behaviour in informal credit markets between individuals, which can result in any number of problems and unpleasant situations. Nearly everyone knows someone who likes to say “I don’t lend money to friends” or someone other people say you shouldn’t lend money to; we sometimes help someone out with a loan only to find out later that they have already borrowed from most of their friends. And when it comes time for a loan to be paid back, we can also sometimes encounter problems that should never happen, e.g., when, on the day the money is due, the borrower simply disappears or ignores our calls. And, worst of all, no one has eliminated the risk of loss or fraud.
When we lack information about the borrower or have had unpleasant experiences in the past, this can increase the time needed to decide whether it is worth lending money at all, and it can also rid us of the desire to help even our friends.
At the same time, while there are already various applications in other spheres of our lives that simplify day-to-day activities and reduce the risks that might arise—from buying a used sofa to ordering a taxi—there is not a comprehensive solution to one very important aspect of our lives: financial relations between individuals.
That is why we came up with the idea of developing the Lendsbay application, which is a lending ecosystem where people can give each other loans, the history of which is stored in a blockchain, and the risk that they will not be repaid is assessed through social and bank scoring.
Our solution makes it possible to borrow money very quickly and easily—concluding an agreement in accordance with the laws of a particular country if necessary—to look for investors or borrowers from your own social circles or just to keep track of your debts, while also making it possible to have your accumulated positive credit history in Lendsbay taken into account when obtaining future loans: in case you move to another country or apply for a bank loan.
Why did the Lendsbay system appear now?
For the Lendsbayplatform to be created, numerous conditions had to be in place, the most important of which is the emergence of an alternative to global financial markets. We are referring to the rapid pace of technological progress, thanks to which everyone now has a device that enables them to carry out any financial operations they want whenever they want; the appearance of blockchain technology, cryptocurrencies and smart contracts, which significantly increased the security of interactions without intermediaries.
The successful experience of various P2P trading platforms for smartphones prepared the groundwork for financial applications. The majority of them, however, were aimed only at formal markets (the banking segment), while the informal market—lending between individuals—remained “in the shadows”.
What is the purpose of the Lendsbay system?
The Lendsbay application was designed for interaction between users. One of the main purposes of the application is to streamline and secure the informal financial market, as well as to simplify the procedure for finding partners and completing transactions. This is what its main functionality was designed for, which includes:
- Simple and easy-to-understand debt management
- The conclusion of a contract based on agreed loan terms
- Notification of current and upcoming events (payments)
- User-friendly search function for borrowers/lenders
- A tool for assessing the borrower’s level of risk
- The creation of social groups (bays)
- Loans in bays (co-workers, friends, classmates)
- A blockchain-based credit history
- Preparation of court documents in the event that a borrower refuses to repay their loan
- The work of bailiffs for court-ordered debt collection
- Resale of distressed debt to third parties or collectors
The platform is not limited to its main basic functions. From the beginning, the application has also included broader, global solutions that allow users to interact with third-party markets, making it possible to record a credit history in other financial companies in different countries. Prospects for project development: the establishment, maintenance and assessment of not only financial but also other socio-economic relations between individuals.
Lendsbay team have already developed a functional and ready-to-use alpha version of the application. The project has a unique team with great experience in banking, in particular in areas such as consumer finance risk management, corporate finance, IT, marketing, derivatives, investment business.
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