How FintruX Lending Platform works?

Source: FintruX Whitepaper Visit here: FintruX website

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Inside the FintruX Network everything is tokenized. In short word, FTX token it the ticket to the FintruX platform.

FintruX Network is a multi-sided platform and ecosystem that delivers value not just to borrowers and lenders, but also to guarantors and agencies.

The lender will deposit funds and choose a credit decision package provided by one of the rated agencies; which include recommended fraud, identity and credit scoring agencies.

Borrowers filter criteria based on available funding parameters and are instantly matched to appropriate lenders. Borrowers can be represented by affiliate marketing agency partners.

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After due diligence, funding is provided and subsequently lenders receive the invested principal and interest upon payments made by the borrowers. Participants will contribute to FintruX platform at funding and for each action as it is being performed on the network.

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FintruX Network charges a fee on matching borrowers to lenders on the marketplace and a modest service fee for each action as it is being performed on the smart contract.

Reward and Punishment

In Fintrux platform, lenders can decide how many FTX Tokens to reward borrowers when they pay on time or punish them on delinquency.

Agencies, guarantors, and FintruX Network are all being paid in FTX Token. Rewards and late charges to borrowers are paid in FTX Token as well. FintruX will continuously sell collected tokens back to the participants to finance the operation and provide liquidity. This creates a token economy for the limited supply of FTX Token.

Collateralization Reserve

What is over collateralization?

Over-collateralization is the process of posting more collateral than is needed to secure financing. Over-collateralization is often used as a method of credit enhancement by lowering the creditor's exposure to default risk.

FintruX Network collects 10% of each loan as over collateralization and injects that into the respective cross-collateralization pools.

In addition, 5% FTX Token has been reserved to cover credit/default losses as a last resort. Since it takes time to repay the loan, there will be a

continuous injection of over-collateralization from new loans.

Combined with wise investment in short term deposits matching the maturity of each obligations, these pools can go up in value making this a safe

insurance to cover the credit/default risk for the benefits of lenders. will be transparent to respective lenders.

Inside FintruX platform, borrowers can get lower interest rates because of credit enhancements. At the end of the term, borrower will receive the 10% of the loan which was held back in over-collateral in which the borrower trust to FintruX network.

At end of term, two scenarios may happen. Borrowers may get the full hold-back of the 10% from the respective over-collateralization calculated based on original value. Alternatively, the lender will receive the principle losses from the cross-collateralization pool in the case of credit/defaults losses. It is operating on a first-come-first serve basis.

FintruX network does not lend their own money. The 10% of loan amount will be used to pay for any delinquencies & default of the same loan. For lenders, loan delinquencies and defaults are covered by FintruX credit enhancers as explain above. The guarantors can earn tokens for guaranteeing selected loans however, they must repay any left over unpaid delinquency or default of loans under their protection by over collateralization.

Conclusion:

FintruX Network primarily aims to serve the underserved such as startups and small businesses to borrow from local accredited investors and financial institutions at the same time giving high security to lenders and their partners.

FintruX Network with transparent open ecosystem will give more freedom in the hands of the people and make things happen for both borrower and lender.

If you want to know more and be part of this great project, FintruX is currently having their crowdsale or token sale.

Click here to know more about FintruX ICO : Token Sale

Authored by:

Bitcointalk profile: @imdada

Source: Whitepaper

Disclaimer: I am not a financial advisor. It is not intended to be investment advice.

I do research and reference the sources that I use within my writing. This is my personal views and opinions and is for information purposes only.