Lenders lead busy lives, always juggling funds trying to maintain a balance between having enough to service new customers but at the same time making sure a good portion of their capital is leveraged and not lying idle.
There are times when a lender might have lots of funds but lack customers. At other times, they may get a customer but may not have enough in reserve to service the loan application. Turning down the customer would of course result in opportunity loss.
HaveFund solves these problems by providing a secure, efficient marketplace for different lenders to buy and sell loans depending on their ever-changing needs. Here’s how the process works.
Let’s say our lender gets a new customer but does not have enough funds to provide the loan.
Rather than turning down the application, he creates an auction on the HaveFund platform to sell the opportunity to other lenders who have more available funds. On submitting the auction, he also specifies a selection policy, which will tell HaveFund what criteria he wants used in selecting the auction winner.
Rather than turning down the application, he creates an auction on the HaveFund platform to sell the opportunity to other lenders who have more available funds. On submitting the auction, he also specifies a selection policy, which will tell HaveFund what criteria he wants used in selecting the auction winner.
As soon as HaveFund receives the application, all alliance members receive instant notifications about the new loan auction.
The loan application is encrypted before being sent to HaveFund, so nobody can see the borrower’s details. Lenders’ current credit policies are sent to the system automatically, also in an encrypted format. The sensitive data is only ever decrypted inside the HaveFund blackbox, which is a hardware-based secure enclave that no party (not even the platform operator) has access to.
The encrypted credit policy is applied to the encrypted loan application, returning an encrypted credit score.
Based on the calculated credit score, lenders can decide whether or not they want to place a bid. Each interested party submits a single encrypted bid. This blind auction (meaning bids amounts are not revealed to other bidders) encourages lenders to put their real best offer forward. The auction is conducted on the HaveFund distributed ledger, meaning all transactions are transparent and auditable, even though the data is encrypted and secure.
When the auction period ends, all the bids are gathered into the Blackbox and decrypted. The Blackbox chooses the auction winner/s according to the selection policy initially submitted by the loan seller when he created the auction.
The selection policy can specify which criteria are most important to the seller. For example, some sellers may select solely based on interest rate, while others may also take loan amount or tenor into consideration.
The seller and the winning bidder are then notified of the auction results. The winner gets a new client. The seller gets a referral fee. The borrower gets the best deal available without having their private information divulged to multiple bidders. Only the winner gets to see this sensitive information. None of the participating lenders’ credit policies are ever visible to any party at any point in the process.
HaveFund, and everyone wins!
