Trufis

Saujanya P. (Director)

Trufis is a digital finance company offering products and services in unsecured consumer credit market. Trufis platform is a Peer to Peer (P2P) lending marketplace /exchange wherelenders and borrowers can meet without immediate intervention of conventional financial institutions such as banks.

Our robust credit checks and built in controls makes sure that only creditworthy individuals and businesses are allowed to access Trufis market place.

Trufis website to come up in 22 weeks

FB page created 19 April 2013, 5 likes.

The key characteristics of peer-to-peer lending are:

it is conducted for profit no necessary common bond or prior relationship between lenders and borrowers intermediation by a peer-to-peer lending company transactions take place on-line lenders may choose which loans to invest in the loans are unsecured and not protected by government insurance loans are securities that can be sold to other lenders

1. Interest ratesset either by lenders who compete for the lowest rate on the reverse auction model , or are fixed by the intermediary company on the basis of their analysis of the borrower's credit

Reverse Auction Model

A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers undercut each other.

Borrowers assessed as having a higher risk of default are assigned higher rates.

2. Risk Lenders mitigate the risk that borrowers will not pay back the money they received by choosing which borrowers to lend to and by diversifying their investments among different borrowers.

Lenders' investment in the loan is not protected by any government guarantee. Bankruptcy of the peer-to-peer lending company that facilitated the loan may also put the lenders’ investment at risk.

3. Revenuegenerate revenue by collecting a one-time fee on funded loans from borrowers and assessing a loan servicing fee to investors, either a fixed amount annually or a percentage of the loan amount

4. ExpenseBecause many of the services are automated, the intermediary companies can operate with lower overhead and provide the service cheaper than traditional financial institutions, so that borrowers may be able to borrow money at lower interest rates and lenders earn higher returns

peer-to-peer lending tends to have both less volatility and less liquidity

FINANCIAL INSTITUTIONS

1. Deposit takers2. Investors3. Insurers

Crowdsourcing

Crowdsourcing is, according to the Merriam-Webster Dictionary, the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers. Often used to subdivide tedious work or to fund-raise startup companies and charities, this process can occur both online and offline. It combines the efforts of crowds of self-identified volunteers or part-time workers, where each one on their own initiative adds a small portion that combines into a greater result. Crowdsourcing is different from an ordinary outsourcing since it is a task or problem that is outsourced to an undefined public rather than to a specific, named group.

SERVICES Offered

on-line investment platform to enable borrowers to attract lenders and investors to identify and purchase loans that meet their investment criteria

development of credit models for loan approvals and pricing verifying borrower identity, bank account, employment and income performing borrower credit checks and filtering out the unqualified processing payments from borrowers and forwarding those payments to the lenders

who invested in the loan servicing loans, providing customer service to borrowers and attempting to collect

payments from borrowers who are delinquent or in default

legal compliance and reporting finding new lenders and borrowers (marketing)

UNITED KINGDOM

1. ZOPA, 2005Issued loans in the amount of 350 million punds42 000 lenders,57 000 borrowersBad loans 0.84%

2. RateSetter, 2010first peer-to-peer lender to make use of a provision fund to safeguard lenders against borrower defaults

3. FundingCirclefirst peer-to-business lender to make use of a provision fund to safeguard lenders against borrower defaults

FundingCircle is currently the second largest lender, having lent over 81 million GBP

4. Assetz Capital2013 lent the largest peer to peer loan in the UK to date at £1.5m for a student accommodation property development loan in Nottingham

GOVERNMENT ROLE

In May 2012, the UK government promised to invest £100 million to small businesses through alternative lending channels, including peer-to-peer lenders, hoping to bypass the mainstream banks that are reluctant to lend. The peer-to-peer companies are predicted to issue up to £200 million of loans in 2012.

REGULATIONS & STANDARDS

In the U.K., the emergence of multiple competing lending companies and problems with subprime loans has also called for additional legislative measures that institute minimum capital standards and checks on risk controls to preclude lending to riskier borrowers, using unscrupulous lenders or misleading consumers about lending terms.

peer-to-peer industry adheres to standards set by the self-governing Peer-to-Peer Finance Association

Peer-to-peer depositors do not qualify for protection from the Financial Services Compensation Scheme (FSCS), which provides security up to £85,000 per bank, for each saver but the Peer-to-Peer Finance Association mandates

the member companies to implement arrangements to ensure the servicing of the loans even if the broker company goes bankrupt

The UK government announced that the Financial Conduct Authority will regulate the industry from April 2014

REGULATIONS

Dealing with financial securities is connected to the problem about ownership—in case of person-to-person loans, who owns the loans (notes) and how that ownership is transferred between the originator of the loan (the person-to-person lending company) and the individual lender(s). This question arises especially when a peer-to-peer lending company does not just connect lenders and borrowers but borrows money from users and then lends it out again. Such activity is interpreted as a sale of securities and a broker-dealer license and the registration of the person-to-person investment contract is required for the process to be legal. The license and registration can be obtained at a securities regulatory agency such as the Securities and Exchange Commission (SEC) in the U.S., the Ontario Securities Commission in Ontario, Canada, the Autorité des marchés financiers in France and Quebec, Canada, or the Financial Services Authority in the U.K.

ADVANTAGES

1. Interest Rates better rates than traditional bank rates can offer for lenders are higher returns than obtainable from a savings account

or other investments interest rates also have a lower volatility than other investment types

2. Credit RiskThe UK peer-to-peer lenders quote the ratio of bad loans at 0.84% for Zopa of the £200m during its seven year lending history, and 2.8% for Funding Circle. This is comparable to the 3-5% ratio of mainstream banks and the result of modern credit models and efficient risk management technologies used by P2P companies

Peer-to-peer lending also attracts borrowers who, because of their credit status or the lack of thereof, are unqualified for traditional bank loans. Because past behavior is frequently indicative of future performance and low credit scores correlate with high likelihood of default, peer-to-peer intermediaries have started to decline a large number of applicants and charge higher interest rates to riskier borrowers that are approved