Wishfinance is leveraging Blockchain for better SME loans
WishFinance is going after the important problem of providing SMEs with timely and friendly loans. By leveraging smart contracts, industry trends and loanee transaction data, WishFinance aims to provide low risk and low interest loans to SMEs. Traditionally, the SME lending market is a rapid growth market. According to the World Economic Forum in Davos, the current state consumer and SME loan market is estimated at $600 billion and will increase to $3 trillion in the coming years.
WishFinance has been operational over the past few years and is running this ICO after running a successful pilot. Founder, Eugene Green says,“From November 2016 to May 2017 Wish Finance conducted a pilot lending project in Singapore, in which we chose 103 small companies from 1,000 SMEs applicants and issued 112 loans with a total portfolio of $500,000. The pilot was a success with 0% default rate. The maximum repayment delay was 43 days, and the average interest rate was 24% p.a. Total revenues were $120,000 p.a.”
SME lending is riddled with issues
Banks generally don’t prefer funding SMEs due to their relatively lesser revenue capacity and hence provide steep and often unfriendly terms for SMEs.
“The SME lending space has many shortcomings. Firstly, entrepreneurs and small businesses find it hard to gain the funds they need from regular lenders quickly and on fair terms. The players who are ready to lend often have unclear structure and shady practices of lending businesses, resulting in significant frauds and scandals, such as the Lending Club in 2016. Also, the high risk of loans to SMEs (principally due to low payment discipline and poor financial literacy), results in rates of up to 50% p.a,” Eugene shared.
To overcome these issues, WishFinance used big data, AI and blockchain to create a scoring mechanism for SMEs, based on which they can offer and process loans in a simple and transparent manner. Eugene says, “POS infrastructure used by the borrower SME, repayments are made automatically by deducting a small 3-5% fee from every POS transaction.”
By controlling repayments, WishFinance claims to have the lowest risk on the market. “To reduce risk even further we ensure each loan against default, while still maintaining high profitability,” added Eugene
Eugene came across as someone who is passionate about SMEs. He said, “SMEs are the backbone of any economy. But more importantly, it holds a lot of emotional importance for many players. The large conglomerates were once SMEs and heavily depend on them as vendors. To individuals, SMEs often represent their first job, the first step in their career. They are also a first step to the world of entrepreneurship. Furthermore, most industry innovations comes from SMEs. It is important to support them in every way possible.”
WishFinance aims to invest proceeds from the ICO to expand from Singapore into new markets, including Hong Kong, South Korea, Scandinavia, Benelux and other locations.
The WishFinanceICO pre-sale will start 15 October 2017.The ICO will start 27 October and will end on 30 November 2017.
Visit WishFinance – https://goo.gl/eJKHzC
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