The borrower enters the loan request and adds collateral to his loan request. The system automatically calculates how much collateral the borrower needs to submit.

The lender can then accept the borrower’s loan request and transfer the funds to the borrower. Smart contracts will keep the borrower’s collateral until the end of the loan term.

At the end of the loan term, the lender will receive the principal and interest payments from the borrower.

If the borrower does not pay, the system will liquidate the borrower’s collateral, and the proceeds will cover the principal plus interest payments.

If collateral liquidation proceeds are not enough, the loss provision fund will jump in and fill the gap.

Additionally, the lender can define a Personal Fixed Income Fund. When this occurs, the entire process is automated for the lender, allowing them to earn some passive income on their assets.

As you see, we’ve two products for income seekers; Crypto Lending and Crypto Fixed Income. Crypto fixed income is an automated algorithm that invests for you. Crypto lending is manual, so if you want to create supply for the requested loans automatically, continue with Crypto Fixed Income; if you’re going to do this manually, continue with crypto lending.

• Non-custodial lending: only borrowers/lenders control their assets; no one else has access to the borrowers/lenders assets
• Borrowers have low collateral requirements
  Wide choice of collateral for the borrowers
• Fixed-term loans: this allows borrowers to reduce the collateral requirements
• Fixed interest loans: this protects borrowers and lenders against the herding movements on the markets and the resulting fluctuating interest rate
• Personal Fixed Income Funds enable a passive income for passive investors
• Widgets for integration: SmartCredit.io offers borrow and lend widgets for the integration partners. These widgets are easy to integrate. And integration partners will earn the loan origination revenues.

People are used to the traditional financial system. And so, we are usually not thinking about how this system is working. But, the reality is that the traditional financial system has strong side effects on society (which were very visible during the Lehman crisis):

Privatizing the benefits: If times are good, the banking system generates high profits and is paying high bonuses. However, what happens if the times are not so good?

Socializing the losses: If the times are not so good, then the governments have to jump in and to re-capitalize the banks. It’s because so far, the banks are essential to keep the economy running. But, of course, no one is claiming back the earlier paid-out bonuses or profits.

The traditional financial system is not sustainable. That’s why we need an alternate financial system. That’s why we need a blockchain-based financial system – and that’s why we created SmartCredit.io.