October 30, 2015
There has been a lot of focus on blockchain’s application for the financial world. There are several segments of the FinTech Industry that are already putting blockchain technology to advanced practice. In one of our previous articles, we discussed the financial use cases of blockchain in the remittance industry. Blockchain technology is also used by the companies in the lending industry, popularly known as bitcoin lending.
Here are some of the companies using blockchain technology to leverage lending services:
1. BTCjam: Founded in late 2012, BTCjam is a marketplace where people from around the world connect to borrow and lend using bitcoin. In October 2013, BTCjam was accepted into the 500 Startups accelerator program and secured seed financing from Ribbit Capital, 500 Startups, FundersClub and Bitcoin Investment Trust. BTCjam moved from Mountain View to San Francisco in February 2014 and began expanding the company. By the end of 2014, BTCjam had facilitated bitcoin loans in excess of $10 million dollars in value with more than 100,000 users in over 200 countries. The company raised its latest funding in January 2015 which was led by Foundation Capital (investors in Netflix and Lending Club), Ribbit Capital, 500 Startups, FundersClub, Bitcoin Investment Trust and Pantera Capital.
There are a few steps that a customer needs to follow in order to secure a bitcoin loan:
- The customer must compose his loan listings and define his own choices (rates, parameters, optional soft credit check)
- Watch investors review, consider, discuss and fund his loan
- Get his bitcoins
- Make the payments
Similarly, BTC Jam helps investors earn solid returns by:
- High rate of return
- Safety of peer-to-peer reputation system and soft credit checks.
- Verification process handled by BTCjam
2. BitBond: The company leverages bitcoin as a technology and payments network to create a global market for small-business loans. Through BitBond's platform, small businesses get access to affordable loans while lenders earn profitable interest rates. BitBond works exclusively with the digital currency bitcoin; neither the borrower nor the lender needs a bank account in order to facilitate the service of the company. The company has originated over 1,000 loans with users from over 120 countries.
3. BitLendingClub (now known as Loanbase): Loanbase is a Chicago-based global lending marketplace which uses blockchain technology. The platform provides small businesses in emerging markets with access to capital at affordable rates from lenders across the globe. Loanbase leverages blockchain technology in order to bring financial innovation to small businesses in emerging markets.
4. BTCPOP: BTCPOP Offers a unique P2P banking experience with instant loans, investment pools, collateral tied loans and more. The company offers instant loans within the bitcoin domain. Instant loans are available after qualifying period.
5. BTC Lend: BTCLend was created to provide lenders and borrows a trusted place to perform Bitcoin lending. Lenders can earn up to 10% APR on Bitcoin deposited into BTCLend.The borrower sets all the parameters beforehand, including the duration of loan and a percentage earned on return. Correspondingly, BTCLend provides a rating for each borrower based on loan repayment history.
Apart from peer-to-peer lending platforms, there are companies which are into SME B2B transactions:
DeBuNe: The company provides a peer-to-peer platform for business-to-business transactions. The company lets small businesses collaborate, market, offer and monetize their expertise or products more efficiently and effectively than any other market-based service. With transparent, secure, agile and open-source peer-to-peer infrastructure, all transactional data is permanently stored on the decentralized public information vault offered by the Nxt crypto-platform’s blockchain technology.