Lending is no new concept either in the commercial world or regular human dealings. Especially in terms of business transactions, it's a vital part of small or even very large business to find a credible source of lending suiting their needs and scaling demands.
With passing time, the mode of operations has changed. However, even after a long evolution of borrowing practices, there is one thing common among all the current lending vehicles and that is their Centralised nature. This prospect is somewhat monopolistic, and often exploitative in nature.
The global borrowing setup was in dire need of something revolutionary to break the barriers of the centralized lending institutions.
One of the companies that have been disrupting the lending industry since 2013 is- Bitbond. It is a German-based lending platform which is tailored as per the needs of small to medium enterprises. The platform is duly regulated, licensed under BaFin, the German equivalent of the SEC.
Being built upon Stellar, the underlying blockchain technology further ensures lower transaction fees and processing charges which facilitates easy and transparent lending between parties.
Bitbond’s Security Token Offering (STO)
Today Bitbond is facilitating business loans of more than $1 million on a monthly basis. To make the platform, even more, investor-friendly, tokens with a face value of €1 representing a debt instrument (Bond) will be issued by Bitbond STO. The Hard Cap is set at €100M and the duration of this bond is fixed at 10 years. The principal amount will be paid in terms of the designated cryptocurrencies only through the currency of the issuance is EURO.
The opening was a phenomenal success. The STO figures smashed away the fund generation barrier of 1 Million Euros in the very first 12 hours.
With Bitbond Tokens every quarter the holders will be rewarded with 1% interest on their invested amount. In addition, the provision of an annual variable coupon is also applicable for the token holders.
Bitbond is a regulated German company and its STO offering prospectus is duly compliant with EU Prospectus Regulations. In order to ensure transparency and quality (which are also two major motives of the platform), the Bitbond STO comes with a Buy-to-Generate token feature. Under this facility, the tokens will be generated only if they are bought. It will maintain quality over quantity under this unique Initiative.
Incapacitating the Shortcomings of The Outmoded Lending System
Bitbond links creditworthy borrowers to professional institutional investors. This blockchain governed platform discourages greedy mediators who can charge sometimes up to 30% just for making the funds available to a small-scale borrower.
Additionally, almost every financial institution is struggling with a long list of defaulters. The rate of unpaid loans increased significantly since the crash of 2018, which has made lending pretty tough recently. The genuine borrowers face this brunt and couldn’t get their funds. Bitbond is an initiative that understands this prospect very well and has been working hard to put things in order.
Blockchain is redefining the financial industry from top to bottom and in fact, has already shaken the foundation of some prominent financial players. The key lies in the cheap transaction costs, improved security features and most importantly new levels of transparency.
Blockchain makes the whole procedure of transacting an open book. Now we can witness pioneers like Bitbond crossing the gap between traditional financial products and new regulated, but highly efficient offerings such as their lending platform and now their STO.
With the Bitbond platform, your risk profile translates into your earning potential as an investor. They allow the potential investor to choose the projects as per their risk appetite.
Bitbond’s STO is an even better way for retail investors to participate in the profits of lending. Instead of having to go through the process of picking the right borrowers, they can hold the BB1 token and receive a fixed annual interest of 4%, plus 60% of Bitbond’s profits from their lending platform.
Where the Investors can earn some seriously good returns for their investments the borrowers to have reasons to be cheerful. Bitbond works like a savior for small business owners who have been denied traditional funding routes. These quick and affordable financing options with lower processing fee and negligible repayment fee protect small business owners from local loan sharks.
How Bitbond Fights Fraud
To minimize the risk associated with lending for both the offering as well as receiving party, the platform employs its own in-house Artificial Intelligence (AI) technology. Their machine learning algorithms leverage the social footprints of the lender across various social media platforms and several financial payment networks.
In cases where a person wilfully or unintentionally defaults on the loan then an agency dealing in debt collection is eventually instructed to take over the case.
The Way Forward
With the six years of experience and a solid foundation, Bitbond has already proved its mettle to close to itself with over 170,000 users and more than USD 15 million loans disbursed.
Radoslav Albrecht and his team have always been at the forefront of the Berlin blockchain scene, and their efforts to go through the process of a BaFin regulated STO, and then raising €1M in the first 12 hours is extremely commendable.