Proposal to improve undercollaterised loans on the inclusive pool of Wing finance. Currently, undercollaterised loans are for 7 days only at one interest rate. I firstly propose we increase the length and duration of loans for each asset type.
Specifically, we can make three pools for each asset type:
Loans for 30 days at a fixed interest rate (determined by suppliers and borrowers at commencement of the loan).
Loans for 60 days at a fixed interest rate (determined by suppliers and borrowers at commencement of the loan).
Loans for 90 days at a fixed interest rate (determined by suppliers and borrowers at commencement of the loan).
Next, we can let the interest rates for each pool be determined by the free market between suppliers and borrowers and the borrower’s Oscore. In each pool, suppliers can select the interest rates and duration they want to offer their funds for and the level of Oscore they will accept. Borrowers can then choose what duration suits them (ie 30, 60 or 90 days) and automatically receive the best average interest rate for that duration from the pool based on their OScore.
Other things to consider:
- Providing automatic renewal of loans for suppliers. i.e, if borrowers have finished borrowing a supplier’s funds, the supplier’s funds immediately go back into the pool to be borrowed by the next borrower at the supplier’s predefined interest rate.
- What type of penalty should be applied for non-payment of the loan by the end of the borrow period? 3. What percentage in collateral is required by borrowers based on their OScore?
If you have ideas regarding improving the inclusive pool, please leave a comment.