Peer to peer lending – Welcome Echizenshi http://welcome-echizenshi.com/ Fri, 07 Jan 2022 07:00:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://welcome-echizenshi.com/wp-content/uploads/2021/06/cropped-icon-32x32.png Peer to peer lending – Welcome Echizenshi http://welcome-echizenshi.com/ 32 32 Zopa’s discontinuation of peer-to-peer lending could signal a risky future for industry innovation https://welcome-echizenshi.com/zopas-discontinuation-of-peer-to-peer-lending-could-signal-a-risky-future-for-industry-innovation/ Fri, 07 Jan 2022 07:00:00 +0000 https://welcome-echizenshi.com/zopas-discontinuation-of-peer-to-peer-lending-could-signal-a-risky-future-for-industry-innovation/ Zopa’s decision to abandon his peer-to-peer lending (p2p) business to focus on banking last month sparked headlines wondering if this heralded the demise of the industry he started and created. As a member of the original team of researchers and entrepreneurs who helped create Zopa, it is sad to see his departure from the p2p […]]]>

Zopa’s decision to abandon his peer-to-peer lending (p2p) business to focus on banking last month sparked headlines wondering if this heralded the demise of the industry he started and created.

As a member of the original team of researchers and entrepreneurs who helped create Zopa, it is sad to see his departure from the p2p loan. But the p2p loan was just a “new 2,500 year old idea.”

Since the dawn of Western democracy, people have formed lending and borrowing networks to provide more equitable livelihoods and financing among citizens – the alternative in the old days was to borrow on terms. onerous to the aristocracy, with a penalty for lack of slavery for yourself. or your family.

While researching and writing our book Crowdfunding and the democratization of financeI and my co-author found evidence that the structure of our financial system has a direct influence on the health and resilience of democracy as a whole.

A financial system built around the idea that stability comes from centralized power and institutions, rather than encouraging more diverse and diverse networks, can often find itself in conflict with citizens who want a larger agency. and more control over their money and what their money does.

Zopa has used technology and innovations to make p2p lending “bigger and better” and provide a real alternative to the conventional bank lending model. Ultimately, however, it was increasingly difficult to scale the business profitably. A full banking license acquired in 2020 offered new avenues to profitability and ultimately returns for its shareholders.

What future for p2p?

Zopa explained that growing regulatory pressures and uncertainty contributed to the decision, as well as the effect of high-profile failures by p2p lenders and unregulated investments.

The exit of this player and other big players in the industry raises questions for the Financial Conduct Authority (FCA) about whether the response to the high-profile but individual platform failures has been proportionate, and what that means for the another statutory objective of the regulator. promote competition in financial markets.

More Ethical money

Since the original idea of ​​Zopa, p2p loans have diversified considerably, allowing individuals to invest in a wide range of different assets. My own platform, Abundance Investment, successfully applied for p2p loan authorization in 2020 to provide investors in community municipal investments a low risk alternative to diversify their holdings into their Innovative Finance Isa.

But the pace of innovation in the sector has slowed considerably in recent years, with more than 16% of authorizations withdrawn or rejected and an ever-changing set of rules and guidance, undermining fintech investor confidence in due to regulatory risk.

These apps may not have been up to the task, but the cost in time, effort and money required to get cleared has increased dramatically as the regulator reacted to scandals both inside and out. -beyond its “regulatory perimeter”.

Zopa’s exit should also make us wonder if we view the role of our financial regulator too narrowly, considering it only to keep our money ‘safe’ when we need one that promotes it. innovation and competition for the benefit of clients – allowing them to take risk, and the chance for higher returns, while making sure they understand that risk.

If all we want is money to be ‘safe’ everyone in p2p and crowdfunding should give up investing and join the ranks of banks. But history shows that the effect of such a shift, effectively putting investment decisions in the hands of a very small number of professional investors, could be profound for the health of our democracy and our society.

Zopa’s exit from p2p loans raises very real questions as to whether the financial regulator is doing enough to encourage innovation that makes money useful to society instead of sitting in bank cash deposits.

Does the regulator’s continued pressure for new rules discourage innovative companies? Away from more democratic and equitable models of lending and borrowing – going back to the days when banks dominated the financial streets? For the sake of our democracy, let’s hope not.

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Neyber co-founder Ezechi Britton named to New Year’s honors list https://welcome-echizenshi.com/neyber-co-founder-ezechi-britton-named-to-new-years-honors-list/ Wed, 05 Jan 2022 05:43:31 +0000 https://welcome-echizenshi.com/neyber-co-founder-ezechi-britton-named-to-new-years-honors-list/ Alternative loansDigital bankSavings and investment Slim picks for fintech names this year, but some familiar faces made the cut. Image source: Ezechi Britton / Code Untapped. CEOs of fintech companies have made regular appearances on New Year’s honor rolls in recent years, and the latest one, released on Friday, had two notable mentions. Ezechi Britton, […]]]>
Alternative loansDigital bankSavings and investment

Slim picks for fintech names this year, but some familiar faces made the cut.

Image source: Ezechi Britton / Code Untapped.

CEOs of fintech companies have made regular appearances on New Year’s honor rolls in recent years, and the latest one, released on Friday, had two notable mentions.

Ezechi Britton, co-founder and former CTO of financial wellness provider Neyber and former judge of the 2019 AltFi Awards, received an MBE (Member of the Order of the British Empire) for service to diversity and youth .

In recent years, Britton has co-founded Code Untapped, a digital skills accelerator for people from under-represented backgrounds, and is also a principal and founder member of Impact X Capital, a £ 100million venture capital fund. dedicated to financing under-represented entrepreneurs.

“I am truly honored to be recognized for the work we do to support diversity and inclusion in technology and I hope this honor will help inspire others to do the same,” Britton wrote on LinkedIn after the announcement of the award.

Other names in finance to be honored include William Russell, Lord Mayor of the City of London and a member of the Innovate Finance advisory board, received a knight for his services to financial innovation, culture and well-being in the City of London, in particular during Covid-19.

Nigel Wilson, CEO of Legal and General, and Richard Meddings, Executive Chairman of TSB, were awarded the title of Knight and OBE respectively.

In recent years, we’ve seen a slew of fintech names receiving titles, including new Open Banking administrator Charlotte Crosswell, who last year received an OBE for her work in financial services.

Rishi Khosla, who heads OakNorth Bank, the firm he co-founded, received an OBE in 2019 “for business services”.

Anne Boden, CEO and Founder of Starling Bank, received an MBE in 2018 for her financial technology services.

Rhydian Lewis, co-founder and CEO of RateSetter, now defunct, also received an OBE in June 2017.

Peer-to-peer lending pioneers Giles Andrews, founder of Zopa, and Samir Desai, founder and CEO of Funding Circle were awarded an OBE and a CBE respectively in 2015.

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Remembering the not-so-expensive mutual funds of 2021 https://welcome-echizenshi.com/remembering-the-not-so-expensive-mutual-funds-of-2021/ Sun, 02 Jan 2022 15:00:00 +0000 https://welcome-echizenshi.com/remembering-the-not-so-expensive-mutual-funds-of-2021/ Walk through a cemetery and you will frequently see phrases like “forever in our hearts” or “you will always be remembered”. The mutual fund graveyard is devoid of these fond memories, but if you look at the latest monuments – to funds that passed in 2021 – you’ll see a number of recurring descriptions, most […]]]>

Walk through a cemetery and you will frequently see phrases like “forever in our hearts” or “you will always be remembered”.

The mutual fund graveyard is devoid of these fond memories, but if you look at the latest monuments – to funds that passed in 2021 – you’ll see a number of recurring descriptions, most often words like “value,” ” tactical “,” favored “and” Asia “.

Every year, a few hundred traditional exchange-traded funds (ETFs) and mutual funds are killed by management that has become disinterested, disillusioned, impartial, disrupted by market conditions, or unable to care. No one mourns their loss.

The funds that took the big nap this year are no exception, a mix of uninspired, clumsy, mediocre marketing failures and investment mistakes.

Yet some funds have created legacies or lessons that investors should remember. With that in mind – and in the spirit of the year-end retrospectives of famous people who have passed away in the past 12 months – let’s tell some stories of funds that were sent to the mutual fund crypt in 2021.

Among the funds that shed their deadly envelope last year:

CAN SLIM Tactical Growth Fund (ticker CANGX) was based on the seven characteristics of large stocks defined and described by William O’Neill, the founder of the Investor’s Business Daily.

CAN SLIM – the method, not the acronym – is followed by many investors, and the fund was meant to offer investors an alternative to pursuing its principles on their own. The problem is, the processes of large investors don’t always translate into performance in funds.

After 16 years in which the fund lagged significantly against its peer group and the Standard & Poor’s 500 index, the $ 31 million fund was closed at the end of August.

Among the saddest stories of the year, IVA in the world (IVWIX) and IVA International (IVIQX) – successors to the legendary SocGen funds headed by Jean-Marie Eviellard – closed in April after seeing two-thirds of assets exit in the past year.

Manager Charles de Vaulx, a protégé of Eviellard, was dedicated to value investing and was a star of classic funds; he was bold, charming and compelling, the kind of personality investors look for when looking for something other than indexing.

He was holding a lot of money in a foamy market, shunning virtually all tech stocks, and sticking to his value and small-cap disciplines in the midst of a raging bull market for growth and large-cap stocks. Morningstar analysts appreciated the funds, but performance was not coming back and investors stopped waiting for a rebound.

Shortly after the business closed, de Vaulx committed suicide.

It’s another reminder that even star mutual fund managers are human; no manager, whatever his track record, is invincible.

Pacer Military Times Top ETF Employers (VETS symbol), VictoryShares ETFs for Top Veteran Employers (VTRN): These pop-up funds have pulled on financial sensitive chords by focusing on national businesses that support the training and professional development of veterans, military, and military families.

It’s an admirable lens, but made for dull backgrounds; they sorted the investment world in a different way, but ultimately were just another general equity fund.

VETS lasted just over two years, while VTRN opened and closed in less than a year, reinforcing a common lesson among departed funds: Marketing ideas that don’t attract assets quickly don’t last long.

the Selective opportunity fund – not to be confused with other funds that have a ‘selected opportunity’ in their name – was launched in 2017 and got off to a flying start, surpassing 1,400 plus funds in the mixed large cap category in 2018, generating a total return of around 8.75%, 15 percentage points better than the group fund average, as measured by Morningstar.

As value managers willing to hold cash, success was short-lived as the market rebounded and value suffered. The manager – quoted during the gray days as saying he was not focused on short term performance, was not able to stay on top for long; the fund was dead last in its peer group for one- and three-year performance when it pulled its lethal reel in June.

Amplify Crowd Office Online Loan and Digital Banking (LEND) tried to harness the power of peer-to-peer lending, but there has been no transfer of power here. In just over two years, it has lost almost a third of its value, another thematic fund failed.

Politicians often talk about reviving the coal industry, and investors have also supported the idea, but the VanEck Vector Coal (KOL) has proven just how difficult this task is, suffering annualized losses of almost 8.5% over its 13-year lifespan, problems that were dramatically exacerbated by a free fall of 88% in 2016. It is a miracle that the fund did not perish immediately after this disaster. ; when a long-term recovery is hard to envision for an industry, it is harder to imagine for the funds investing in it.

JPMorgan International Advantage (JFTAR) – one of the biggest liquidations in recent memory – proved that you don’t have to be good to grow and save investors for decades. The fund has followed around 95% of its peer group throughout its lifespan, never showing “benefit” to shareholders.

Of the fund’s $ 1.2 billion when the fund entered Big Sleep in February – just before its 20e anniversary – not a penny belonged to the fund managers. Go figure it out.

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CTOS extends its offerings | The star https://welcome-echizenshi.com/ctos-extends-its-offerings-the-star/ Sat, 01 Jan 2022 01:39:31 +0000 https://welcome-echizenshi.com/ctos-extends-its-offerings-the-star/ The acquisitions proposed by CTOS Digital Bhd are considered by stock market analysts to be positive and generate profits, while providing synergistic advantages and accelerating growth for the group. On December 24, CTOS Digital said in a filing with Bursa Malaysia that it was offering to purchase a 49% stake in financial technology (fintech) specialist […]]]>

The acquisitions proposed by CTOS Digital Bhd are considered by stock market analysts to be positive and generate profits, while providing synergistic advantages and accelerating growth for the group.

On December 24, CTOS Digital said in a filing with Bursa Malaysia that it was offering to purchase a 49% stake in financial technology (fintech) specialist JurisTech (Juris Technologies Sdn Bhd) for RM 205 , 8 million – the largest acquisition ever made by the group since its inception, as well as an additional 2.25% stake in Business Online (BOL) for a maximum of 276.9 million baht (RM34.9 million) .

This would bring its stake in BOL to 24.9% (from 22.65% previously).

Kenanga Research indicates that to finance the acquisitions, the research unit assumes that CTOS Digital will have a private placement of 136.5 million new shares.

“At a five-day volume weighted average price of RM 1,763, CTOS could increase RM 240.7 million, with RM 205.8 million for JurisTech and RM 34.9 million for BOL. This would increase CTOS’s share base by 6.2%, ”he said.

JurisTech, incorporated in 2003, provides an end-to-end credit management platform that enables its clients (primarily banks and financial institutions) to digitally acquire clients, assess borrowers, approve loans and collect debts.

Kenanga Research says it will complement CTOS’s existing services of providing credit information and analysis to customers. By combining JurisTech’s software and CTOS’s extensive database, the duo can jointly develop new digital lending solutions that include credit data, software and analytics services.

These services are popular given the increased demands for digital transformation and improvement of banks (such as Electronic Know-Your-Customer or e-KYC) and the growing demand for data analytics solutions. CTOS and JurisTech can also cross-sell to their respective customers, he notes.

Kenanga Research points out that CTOS pays 23 times the estimated price to earnings ratio (PER) for fiscal year 21 (fiscal year ending December 31, 2021) to JurisTech.

“There are no direct comparables for a fintech like JurisTech, and its closest competitors are not listed. However, given the obvious synergies and scalability of JurisTech’s software services, we believe the price is right. Note that other global credit bureaus listed (no direct comparables) are trading at 40 times the estimated PER for FY21, ”says the research unit.

Kenanga Research adds that the acquisitions will increase CTOS ‘profits from partners, increasing estimated base net income for fiscal 22 (year ending December 31, 2022) by 7%.

However, the 6.2% earnings dilution due to an expanded stock base would weigh on and increase the estimated FY22 earnings per share (EPS) by only 1%.

Although the increase in earnings is diluted by the placement, Kenanga Research reiterates its call for “outperformance” on CTOS shares as it enables the group to provide end-to-end digital lending service. It maintains its fully diluted price target of RM2 at 55 times the estimated PER for FY22, as the improvement in EPS is insignificant over FY22.

Meanwhile, RHB Research says it remains positive about CTOS ‘growth prospects, given its unique growth preposition in the age-old trend of digitization, and the proposed acquisitions are expected to accelerate growth through new solutions and collaborations. .

“We support the EPS generating proposals as they should enable CTOS to expand its offerings and deliver integrated digital solutions that encompass data, platform and data analytics capabilities, in order to capture the huge growth opportunities for digital lending, ”says RHB Research.

The research unit also considers the acquisition price of JurisTech to be “fair”, given the synergistic angle, robust growth prospects and given the wide range of valuations among its listed peers in the software space, with fundamentally distinct differences.

RHB Research notes that the acquisition price of RM 205.8 million will be subject to further price adjustments after confirmation of the audit on the gross value of the proposed capitalization of assets generated internally by JurisTech.

She recalls that given that up to five digital banking licenses could be issued from the first quarter of 2022 and with the emergence of various peer-to-peer and micro-credit players, the acquisition will allow CTOS to better equip itself, and put it firmly on the path to becoming a leading service provider with a unique proposition to capture the growth of this emerging trend.

“Additionally, the potential opportunities to cross-sell and tap into each other’s customer base regionally are other win-win outcomes,” said RHB Research, which maintains its “buy” call on CTOS and an award. target of 2.42 RM.

Meanwhile, Hong Leong Investment Bank (HLIB) Research says it is positive about the developments as they would improve CTOS ‘estimated FY22 EPS by around 5%.

“Our estimates reflect the total dilution of the enlarged share base of 2.34 billion shares resulting from the private placement; and approximately RM 8.1 million at the net level of the acquisition of both a 49% stake in Juris Technology and a 2.25% stake in BOL, ”HLIB Research said.

He believes that although CTOS will maintain its net cash position of RM14.1 million after the three corporate years, this is to some extent an inefficient use of its capital structure.

HLIB Research also estimates that the RM205.8mil for a 49% stake in JurisTech would result in an estimated PER for FY 21 of 28.5 times.

“Since there are no directly listed peers, we consider the acquisition inexpensive compared to current valuations of other listed fintech companies such as Revenue Group Bhd (46 times) and GHL Systems Bhd (40 times), based on consensus estimates of earnings for FY21, ”he says.

However, HLIB Research is slightly negative on the proposed additional 2.25% stake in BOL as it considers the transaction “a bit expensive and would only slightly increase CTOS ‘profits”.

“Based on consensus earnings estimates, this additional 2.25% stake will increase CTOS’s estimated base earnings for fiscal year 22 by 6.9 million baht (RM 0.87 million),” said the research unit.

HLIB Research says it continues to love CTOS because it is ready to take advantage of the bright prospects in Asean’s credit reporting industry, its position as the leading credit reporting agency (ARC ) in Malaysia with an estimated market share of 71.2% in 2020, its long-term relationships with its clients with more than three decades of history with domestic banks and financial institutions and the nature of its business which presents an extremely high barrier to entry.

HLIB Research maintains its “buy” call on CTOS with an unchanged discounted cash flow derivative target price of RM 2.45, implying an estimated PER for fiscal 22 of 74 times, which is a premium per compared to the average term estimate for fiscal 22 of its global CRA peers. PER 34 times.

“We believe that the valuation premium is justified because we expect CTOS to grow faster than its peers, with estimated growth for fiscal years 21 to 22 of 27% and 26% respectively against an average of 12% and 10 % for its global peers. “

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DeFi is the new thing in crypto. But what is it? https://welcome-echizenshi.com/defi-is-the-new-thing-in-crypto-but-what-is-it/ Thu, 30 Dec 2021 09:01:03 +0000 https://welcome-echizenshi.com/defi-is-the-new-thing-in-crypto-but-what-is-it/ Decentralized finance is at the heart of the crypto revolution. Or so the hype says. The year the world woke up to the reality of cryptocurrency as something other than a combination of tech toy and tool of criminals, DeFi stood out. With $ 100 billion invested, that’s far too big for mainstream finance to […]]]>

Decentralized finance is at the heart of the crypto revolution. Or so the hype says.

The year the world woke up to the reality of cryptocurrency as something other than a combination of tech toy and tool of criminals, DeFi stood out.

With $ 100 billion invested, that’s far too big for mainstream finance to ignore. DeFi is, in many ways, a cryptocurrency on its purist: a financial tool that doesn’t need a banker or bank, broker or brokerage.

It’s a completely peer-to-peer way of doing what financial institutions have done for centuries – providing a trusted source – without paying the tithe demanded by a trusted third party.

This is why it has attracted so much attention. But the theory is usually more complicated than the facts, and that’s certainly the case with DeFi.

Decentralized exchanges (DEX) can offer cheaper and faster transactions and derivatives than even “centralized” crypto. And lending and borrowing platforms can offer lenders and borrowers much better rates than any bank.

However, like any financial offer, DeFi comes with risks: the same old frauds and the new technological wrinkles of a technology without correction or redesign. And there are also new products to understand: yield farming and liquidity pools, for example.

Over the course of these 10 articles, we’re going to break it all down in clear, consistent language for people new to crypto and DeFi. By the end of it, you’ll have a solid basic understanding of how DeFi works, the potential risks and rewards, and what people are talking about when they sing its praises. You will know how to separate the high-powered chaff from the wheat to invest.

What is DeFi

DeFi is hot. This is the most promising – and problematic – part of FinTech cryptocurrency. It’s a $ 100 billion juggernaut that “everyone” says will be the downfall of big business, replacing commission-hungry bankers with smart contracts that allow DeFi projects to operate without any central authority. The hype says DeFi is capitalism in its purest form. The end of Wall Street. The cynic says, “Let’s look under the hood.”

See here: What is DeFi?

What are the best DeFi platforms?

DeFi is the most rewarding and risky part of the blockchain revolution, which is perhaps why $ 3.7 billion was invested in a project called “SushiSwap”. The number of DeFi projects is growing exponentially and causes a lot of frauds and failures with its success. Here’s a look at some of the biggest and most successful.

See here: What are the best DeFi platforms?

What is a smart contract?

Smart contracts are the building blocks of DeFi. Of course, this is true for any blockchain project that is not a pure cash replacement, from NFTs to supply chain management tools. Self-executing contracts are immutable. Once accepted and the funds blocked, the contract will be paid without the need for a trusted intermediary and cannot be modified or canceled. Smart contracts can be complex enough to build decentralized apps and dumb enough to do what you said, not what you meant – Warning given form.

See here: What is a smart contract?

What is Yield Farming and Cash Extraction?

Yield farming and cash mining are ways to put your crypto to work for you. DeFi lending platforms and DEXs use pools of liquidity to make loans and transactions rather than matching a borrower with a lender or a buyer with the seller. Crypto locked in these pools generates interest and fees. There are many variations on this simple theme, some much more complex and lucrative – or damaging.

See here: What is Yield Farming and Cash Extraction?

What is staking?

Staking is new mining, a way to validate transactions and add them to a blockchain that is much faster and more energy efficient than slow and polluting Bitcoin. Far more scalable than mining, staking is what is needed to allow blockchain to compete with Visa as a transaction processor. It is also a good way to earn passive income with your crypto.

See here: What is staking?

The 10 Best Uses of DeFi

What is DeFi used for? Well, there are a lot of uses starting with decentralized exchanges and lending platforms. Besides trading and borrowing with human interference, DeFi is a good way to enter into derivative contracts, create markets, and can be used in the game and metaverse worlds, among others.

See here: What are the top 10 uses of DeFi?

Governing the Ungoverned: Unzip DeFi and DAO

DeFi platforms operate without any central control or human interference. So how do you make changes – for example, fix a bug, change an interest rate, or add a cryptocurrency trading pair? By voting, of course. Thus, the decentralized autonomous organization, or DAO, which is a governance system controlled by smart contract.

See here: Unpacking DeFi and DAO

The very real risks of DeFi

The idea of ​​DeFi is that there is no central control – no human interference, no trusted third parties of any kind. So what do you do when something goes wrong, from fraud to a costly typo in a hastily drafted smart contract? Nothing. And that’s not the worst risk: fraud, market manipulation, frequent and quick margin calls. DeFi has a lot of risks.

See here: The very real risks of DeFi

What are the best DeFi blockchains?

DeFi is built on Ethereum, and Ethereum cannot handle its success. Blockchain # 2 is blocked by the number of transactions DeFi sends to it, which slows it down and the transaction fees are very high. So what are you doing? Build a better blockchain. Here are some of the top contenders to be Ethereum Killers – a nickname that may be too ambitious but gives some idea of ​​the goal: to steal his plans.

See here: What are the best DeFi blockchains?

DeFi: what is hyped, what is real and what matters

We’ve walked through the what and how of DeFi, so it’s time to take a step back and take a look at its reality. There is a lot of hype, but there is also a lot of value and opportunity. Here’s a look back.

See here: What is real, what is hyped, what matters

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NEW PYMNTS DATA: AUTHENTICATION OF IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

On:More than half of American consumers think biometric authentication methods are faster, more convenient, and more reliable than passwords or PINs, so why are less than 10% using them? PYMNTS, working with Mitek, surveyed over 2,200 consumers to better define this perception gap in usage and identify ways in which businesses can increase usage.

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Digital financial transactions need a safety net: The Tribune India https://welcome-echizenshi.com/digital-financial-transactions-need-a-safety-net-the-tribune-india/ Wed, 29 Dec 2021 00:51:00 +0000 https://welcome-echizenshi.com/digital-financial-transactions-need-a-safety-net-the-tribune-india/ Amandeep Singh Kapoor Director, Central Detective Training Institute, Jaipur The Prime Minister recently called for a FinTech revolution with a security shield. The RBI Digital Lending Task Force has submitted its recommendations, making it an opportune time to analyze the current digital ecosystem, not only in the area of ​​loans but also payments, and what […]]]>

Amandeep Singh Kapoor

Director, Central Detective Training Institute, Jaipur

The Prime Minister recently called for a FinTech revolution with a security shield. The RBI Digital Lending Task Force has submitted its recommendations, making it an opportune time to analyze the current digital ecosystem, not only in the area of ​​loans but also payments, and what it will take to resolve trust issues. The disruption of these areas of digital lending and digital payment was expected, given the colossal gaps in financial inclusion and lessons learned from the JAM (Jan Dhan-Aadhaar-Mobile) and UPI (Unified Payment Interface) experience. of the Indian economy. The accentuated angularities of the current ecosystem must be rounded off.

The Indian digital landscape has seen the emergence of new digital lending models due to the supply-demand matrix, accentuated in part by the distress caused by the Covid situation: (a) NBFC / digital platforms owned by banks in which the RBI has oversight (balance sheet lenders because they lend their own money); (b) Digital platforms working in partnership with NBFC / banks, acting as intermediaries, and therefore not registered with the central bank but governed by proxy by the RBI regulations applying to banks / NBFC (loans on the market, where others are allowed to lend); (c) Peer-to-peer (P2P) lending platforms, new mostly unregulated entities, equipped with digital tools, closest to the borrower in need. The RBI has mandated these retail lenders to seek regulation as P2P-NBFC. “Payday Loan” platforms and “Buy Now, Pay Later” provisions also fall into this category.

Loans without creditworthiness and without KYC make foreclosure easier. Unethical and unauthorized use of personal data to mitigate deadly and coercive methods of paying off exorbitant, unregulated interest rates makes egress impossible.

Right now, full-fledged P2P platforms connect lenders (cash-rich investors looking for attractive returns) with borrowers with poor credit scores or who do not have conventional financial reach. Going forward, India Stack will help private actors enable the disruption. India Stack is a set of APIs (Application Programming Interface), which enables government and private companies to deploy cashless and paperless technology products independent of their owners to transform India into a cashless economy.

It would even allow the street vendor who doesn’t have a bank account to digitize all of their transactions and use that information to grow their business. Through the Open Network for Digital Commerce, the government seeks to replicate the success of the Open Network for Digital

E-commerce, hoping to build a backbone where sellers and logistics service providers can connect with buyers, regardless of what platform they use through open APIs.

A large portion of digital retail payments in India is handled by the National Payment Corporation of India (NPCI), an incorporated non-profit corporation in which various national banks are shareholders. UPI, Immediate Payment Service (IMPS), Bharat Bill Pay, Aadhaar Activated Payment Service (AEPS) and RuPay are retail payment platforms operated by the NPCI.

The RBI had invited expressions of interest last year as part of a plan for new entities to create new digital payment platforms other than NPCI, called New Umbrella Entities (NUE). These were to be for-profit platforms (charging fees for transactions eg utility bill etc), presumably to reduce concentration risks and also for more options in the market. Six consortia, including Amazon, Facebook and the Tata group, applied in partnership with Reliance, ICICI etc.

But the RBI has put the plan on hold, realizing the risks of allowing the private sector to run payment platforms until data protection law is in place, learning lessons from non- Masterbank’s compliance with localization of data and data breaches to MobiKwik, etc.

The landscape is strewn with both unscrupulous actors and genuine entities. There is and always will be pressure to balance regulation with innovation. There is more and more clamor for “Soft Touch Regulation”, a euphemism for self-regulation. But self-regulation is easier said than done. The reason why unauthorized lending platforms have mushroomed is the existing asymmetry in credit information that lenders face vis-à-vis borrowers. It could have been put back a long time ago. The RBI proposed a public credit registry (credit information database), accessible to all stakeholders, and an open network for credit (infrastructure protocol for loans based on consent-based operations). ), which will favor legitimate actors and crack down on unauthorized lenders.

The current digital lending landscape is governed by the existing code of fair practice for NBFCs and banking instructions issued by the RBI from time to time, including the most recent instructions from the Master Direction NBFC-P2P (Bank reserve), 2017. The Money Lenders’ The law (Sahukar Act, as it is called in some states), in most places of jurisdiction, has been obscured and lost weight due to poor rules and statutes. regulated and supervised. States such as Telangana have strict, non-releasable covenants that have proven helpful in combating fraud related to instant loan applications. Industry associations also suggest that there should be a law prohibiting short-term loans (less than 60 days). The existing data protection law is the need for the digital lending and digital payment fields to operate smoothly and securely.

The task force suggested a nodal agency to verify all digital lending applications. He also suggested stricter standards for “buy now, pay later” loans and government notification to bring them on par with traditional credit facilities. Quite rightly, he suggests that regulated entities take responsibility for complying with the standard protocols of conduct of business of attached entities. Likewise, the emphasis on protecting the privacy of citizens’ data is a sine qua non.

Similar brainstorming is underway in the area of ​​digital payments. There is no doubt that a well-thought-out central bank strategy with last mile connectivity by law enforcement agencies will help solve the problems we face today.

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Digital innovation to create new services https://welcome-echizenshi.com/digital-innovation-to-create-new-services/ Mon, 27 Dec 2021 09:02:59 +0000 https://welcome-echizenshi.com/digital-innovation-to-create-new-services/ It’s no secret that the coronavirus pandemic has helped accelerate the shift to digital payments – but surprisingly, the need to transact remotely is not driving these trends. On the contrary, there is plenty of data to suggest that digital transactions were already on a digital switch-over path before the pandemic – COVID-19 was just […]]]>

It’s no secret that the coronavirus pandemic has helped accelerate the shift to digital payments – but surprisingly, the need to transact remotely is not driving these trends. On the contrary, there is plenty of data to suggest that digital transactions were already on a digital switch-over path before the pandemic – COVID-19 was just an acceleration of what was already a transition underway.

Luke Gebb, senior vice president of Amex Digital Labs, told PYMNTS in an interview that there are two reasons behind the current transformation. The first, and most obvious, is that the technology needed to support digital payment transformation has only recently matured to a point where it can be used to conveniently and securely conduct transactions. Second, with the transition of payments from analog to digital comes an explosion of new features and financial capabilities that were not available to consumers before.

For example, Gebb said that digital payments come in more form factors today and offer a lot more functionality than ever before. There are buy now, pay later (BNPL) services that weren’t available a few years ago, account-to-account (A2A) services like Venmo and Zelle, and even crypto, which offers cross-border transactions, high yield and loans. options, he explained.

“You just have this blast [of tech] and the ability to deliver all of these features, and consumers want those features, ”Gebb said. “The pandemic, when it arrived, added security concerns around contact with money and proximity to other people, and so it only accelerated this trend. “

Read more: Small businesses must have digital technology to win Black Friday sales

Seismic change in payments

The digital payment transition is happening everywhere, with people exchanging money for credit cards, debit cards, and peer-to-peer (P2P) payments, Gebb explained.

He pointed to Amex’s own data which shows how cardless transactions jumped 45% from 2019 to 2020. Amex has seen an explosion in payment volume thanks to its partnership with PayPal and Venmo, he added. .

Gebb said consumers are demanding more options than ever before and therefore the onus is on merchants to provide them. Consumers want to pay using whatever method they choose, whether it’s a specific credit card, their choice of bank account, or some other emerging method.

Consumers are also demanding greater security in digital transactions, leading to the adoption of new concepts such as tokenization, where Amex facilitates a transaction using a single virtual card number.

“Scenarios like this, where safety is at the forefront of customer concerns, will increase,” Gebb said. “Also, this notion of having your customer’s back will become more important as payment options develop and become more complex. “

Call for Clarion merchants

The result is that merchants must prioritize innovation in digital payments or could risk losing business to those who do. Gebb sees innovation across the entire value chain as essential, from product sourcing and display, sales channels and maintenance monitoring.

You may like: 64% of businesses move away from physical invoices as COVID strengthens the digital shift

“Traders need to innovate across the spectrum, and this is what we see happening among the most successful,” Gebb said. “And the absence of it will certainly be detrimental.” The good news is that most traders seem to be receptive to this need.

Gebb said there will continue to be a proliferation of rail types and payment options as payments continue to transition to the digital realm. It sees even more growth in terms of open banking interfaces, cryptocurrencies and BNPL.

There will also be more demand for borrowing services and those who want a return on the dollars they hold, Gebb believes, and security will continue to be a major focus.

“This kind of arms race will develop between companies who want to protect their customers, pushing the boundaries of security faster than fraudsters can operate in the ecosystem,” Gebb said.

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NEW PYMNTS DATA: AUTHENTICATION OF IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

On:More than half of American consumers think biometric authentication methods are faster, more convenient, and more reliable than passwords or PINs, so why are less than 10% using them? PYMNTS, working with Mitek, surveyed more than 2,200 consumers to better define this perception gap from usage and identify ways in which businesses can increase usage.

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Changes in the regulatory landscape https://welcome-echizenshi.com/changes-in-the-regulatory-landscape/ Sat, 25 Dec 2021 04:12:00 +0000 https://welcome-echizenshi.com/changes-in-the-regulatory-landscape/ NBFCs were introduced and conceptualized with the aim of complementing the credit intermediation function of banks, diversifying access to financial services and promoting healthy competition in the financial services sector. In order to promote the growth of NBFCs in line with their objective, the regulatory framework for the regulation of NBFCs has been designed on […]]]>

NBFCs were introduced and conceptualized with the aim of complementing the credit intermediation function of banks, diversifying access to financial services and promoting healthy competition in the financial services sector. In order to promote the growth of NBFCs in line with their objective, the regulatory framework for the regulation of NBFCs has been designed on the fundamental principle of less rigorous regulation, against banking companies.

The regulatory design was deliberately crafted to strike a balance between the operational flexibility available with NBFCs to grow at a sustainable pace and to expand the reach of the formal financial services sector into unbanked areas. Gradually, with the growing nature of NBFCs, a nuanced regulatory framework followed.

According to RBI statistics, NBFCs accounted for 12% of the size of banks’ balance sheets in 2010. By 2020, that figure rises to 25%. Over the past 5 years, the balance sheet size of NBFCs (including housing finance companies) has doubled. It was Rs 20.72 lakh crores in 2015, which rose to Rs 49.22 lakh crores in 2020. The other side of the phenomenal growth that the NBFC sector has witnessed has been the failure of a few large NBFCs, leading to insolvencies and liquidity stress in general in the sector.

With the aim of revising and revisiting the regulatory framework governing NBFCs, RBI, in its statement on development and regulatory policies dated December 4, 2020, proposed a regulatory approach at scale related to the contribution to systemic risk. of NBFCs. It released a discussion paper for public consultation on January 22, 2021 and, based on the contributions received, introduced “Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs” in October 2021.

The SBR regulatory framework classifies NBFCs into 4 layers based on the size, activities and perceived risk of NBFCs. These 4 categories are (i) the base layer – this will include NBFCs not accepting deposit below the size of Rs 1000 crore and NBFCs which only act as a peer to peer lending platform, aggregator accounts, non-operational financial holding company or NBFC that do not benefit from public funds and do not have a client interface; (ii) Mid-Layer – this will include all NBFCs accepting deposits, all NBFCs not accepting deposits with an asset size of Rs 1000 crore and above, and NBFCs acting as a stand-alone prime broker, funds of infrastructure debt, core investment companies, housing finance companies and infrastructure finance companies; (iii) Top Layer – it will have NBFCs which are specifically identified by the RBI requiring increased regulatory oversight based on predetermined parameters and rating methodology. In addition, this layer will always be made up of the 10 largest NBFCs in terms of asset size, regardless of any other factor; and (iv) Top Layer – this layer will only be NBFC which in my opinion from RBI has turned into a potential systemic risk.

In addition to categorizing NBFCs into 4 different layers, base size and activities, the SBR regulatory framework has also increased the amount of minimum net held funds for a few categories of NBFCs, and revised the guidelines for NPA classification. by the NBFCs by replacing the old 90-day guidelines for all categories of NBFCs. RBI has proposed a descent path to make the aforementioned changes, in the net minimum fund held and in the NPA classification.
The guidelines introduced several changes in the corporate governance requirements of NBFCs and also pushed for professional expertise in the board of directors, requiring NBFC boards to have at least one member in their board of directors having previous experience of working at a bank or NBFC. In addition, RBI also introduced a cap of Rs 1 crore per borrower on the financing of the subscription to the initial public offering and also introduced a cap for exposure to sensitive sectors, which includes direct and indirect exposure to capital markets and exposure to commercial real estate. , including the sub-limit for the financing of the acquisition of the land.

The SBR regulatory framework will help RBI keep a close watch on NBFCs and allow RBI to take corrective action and intervene at the right time before a particular NBFC becomes a systematic risk to the economy as a whole. Classification and regulations based on size and assets will also ensure that there will not be a deterrent effect on all categories of NBFCs due to rigorous regulatory oversight on a particular category of NBFC.

The SBR regulatory framework will also educate the general public to identify the risk associated with particular NBFCs. Also, it will be interesting to see how RBI keeps stakeholder interest at the forefront when a particular NBFC is moved from the top layer to the top layer.

Although the SBR framework offers a holistic view, it is expected that the detailed regulatory guidance to be introduced will cover the finer aspects recognizing the immense potential of NBFCs.

– Author’s Veena Sivaramakrishnan is Partner and Yugal Jain is Senior Partner, Shardul Amarchand Mangaldas & Co.

(Edited by : Priyanka Deshpande)

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4 Indian Fintech startups of 2021 that brought a technological revolution to the Fintech space | AFN News https://welcome-echizenshi.com/4-indian-fintech-startups-of-2021-that-brought-a-technological-revolution-to-the-fintech-space-afn-news/ Thu, 23 Dec 2021 14:00:52 +0000 https://welcome-echizenshi.com/4-indian-fintech-startups-of-2021-that-brought-a-technological-revolution-to-the-fintech-space-afn-news/ Previous story: The social media trends that reigned over our hearts in 2021! 4 Indian Fintech startups of 2021 that brought a technological revolution to the Fintech space Posted on December 23, 2021 Today, Fintech is so ubiquitous and many solutions are an integral part of our life. Even traditional laggards like the way lending […]]]>
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The social media trends that reigned over our hearts in 2021!

4 Indian Fintech startups of 2021 that brought a technological revolution to the Fintech space

Posted on December 23, 2021

Today, Fintech is so ubiquitous and many solutions are an integral part of our life. Even traditional laggards like the way lending and borrowing work have been swept away by technological innovation. On the other hand, 2021 has witnessed a transformational change in the payments ecosystem. With this limitless flow of customer inquiries, there is an increase in widespread innovation in payments which, in turn, squeezes the traditional payments market.

The payment system has changed the way we do business. Here are some of the FinTech companies that are making headlines in the FinTech industry and reaching various markets with their unique financial solutions.

  1. ToneTag: Backed by Amazon, Mastercard, 3one4 capital and Amensa, ToneTag is the world’s largest sound wave communication technology platform. This technology uses sound waves to enable contactless, offline, and proximity data communication on any device. With 15 patents filed around the world and multiple grants, this Bengaluru-based company is changing the landscape of payments and transactions in India. Leading this initiative is ToneTag’s Retail Pod, a sophisticated payment acceptance device capable of accepting payments from any phone, basic or smart, working with or without the Internet. One of the key features that makes the Retail Pod a promising prospect is its OTP sound-based authentication, in which the Retail Pod itself authenticates the bank’s incoming OTP and completes the transaction using its technology. Highly secure 3-layer encrypted sound. The simplicity, security and sophistication of ToneTag’s Retail Pod have captured the interest of both merchants and consumers; this fact is proven by the 3 10,000 merchants who use it for their daily Peer-to-Peer transactions and the 100 million customers who use ToneTag’s proprietary technology for their daily payments.

Please find attached the technological advance achieved by the firm in 2021 in the FinTech space:

ToneTag has successfully executed offline voice payments through multifunction phones and smartphones in areas with inconsistent internet connectivity, with people not digitally savvy or struggling to use apps for banking or payments, making digital payments a reality for all
With this recognition, ToneTag is now poised to provide voice-based digital payment options to over 600 million first-time multifunction phone users to improve their lives, build businesses and take control of their lives. finances, leading them to digital empowerment.

  1. Eko: Eko, one of the fastest growing fintech platforms in India, empowers a generation of ambitious entrepreneurs to improve their financial health and access to the global economy. Eko helps small entrepreneurs discover income opportunities, digitalization tools, and early access to credit, each designed to meet their needs. Since 2007, Eko has built a technology platform which, at its peak, processed Rs 2,500 Crore through 70 million transactions in a month. Eko has served over 35 million customers through a network of over 2.5 Lakh vendors, with 20% month-over-month growth. These vendors help brands sell their digital products and services and assist their customers with their transactions.

Please find attached the technological advance achieved by the firm in 2021 in the FinTech space:

· Eko has made a foray into the lending ecosystem by creating the “first credit” module for ambitious sellers.

· Eko strives to help them overcome these challenges by working with NBFCs and P2P lending organizations. By providing $ 1 billion in loans with a flexible repayment infrastructure, the company aims to provide affordable capital and AI-backed services to MSMEs, enabling them to instill digital transformation within their operations.

· Eko has started using the ‘micro-credit approach’ in its services and designs them to respond to the same. Its daily repayment infrastructure capability allows sellers to repay loans in part or in full on a daily basis.

· Eko’s model also uses demographics and seller engagement data to drive effective results.

  1. Nivesh: Nivesh is a mobile digital platform that helps distributors of mutual funds and other financial products deepen their penetration in the country using cutting-edge technology. The platform allows distributors to expand their business and attract new customers, who can now be served for different AMCs and thus benefit from improved portfolio performance. This year, the platform recently raised $ 1.6 million under the leadership of the IAN Fund. In 2020, Nivesh was listed in WealthTech100, which is an annual list of the world’s top 100 Wealth Tech companies selected by a panel of industry experts and analysts. The selected companies have been recognized for their innovative use of technology to solve a significant industry problem, generate cost savings or improve efficiency throughout the investment value chain.

Please find attached the technological advance achieved by the firm in 2021 in the FinTech space:

The IAN Fund has supported Nivesh’s forays into insurance with the launch of an insurance platform called Samavesh
Thanks to Samavesh, Nivesh will reach over 3000 PIN codes and partners in around 200 PIN codes
The platform will allow customers to select the right insurance plan after comparing quotes from multiple insurance companies

  1. Capital Float: Capital Float is India’s leading buy it now and credit platform serving a mix of salaried and self-employed people. From providing innovative over-the-counter credit solutions for consumers to financing the business and personal needs of individuals, we are leading the charge in solving the country’s enormous credit problem. Powered by rigorous innovation and technological advancements, and with the acquisition of India’s leading personal finance management application – Walnut in 2018, we are proud to be recognized as a pioneer of the Fintech revolution in India. We passionately serve our clients with cutting edge financial products and strive to help them #BreakLimits. Due to decades of informal lending, a large majority of clients do not have the necessary official documents to be eligible for credit. If they have the prior documentation, they often struggle with the challenges posed by the structural bureaucracy of lending in India. – Meanwhile, due to the country’s gargantuan geographic landscape, several formal lenders are unable to meet the financial needs of clients in Tier 2 and 3 cities.
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Liquid Meta Hits Market As Only Institution-Focused DeFi Application Provider https://welcome-echizenshi.com/liquid-meta-hits-market-as-only-institution-focused-defi-application-provider/ Wed, 22 Dec 2021 00:00:00 +0000 https://welcome-echizenshi.com/liquid-meta-hits-market-as-only-institution-focused-defi-application-provider/ A new decentralized finance company is about to debut in public markets, one that seeks to capitalize on growing institutional interest in the space. Cash Meta Capital Holdings (NEO: LIQD), a decentralized finance infrastructure and technology (DeFi) company, has just announced its listing date. Given the intense interest and meteoric growth in the industry, this […]]]>

A new decentralized finance company is about to debut in public markets, one that seeks to capitalize on growing institutional interest in the space. Cash Meta Capital Holdings (NEO: LIQD), a decentralized finance infrastructure and technology (DeFi) company, has just announced its listing date. Given the intense interest and meteoric growth in the industry, this is one industry that promises to be included in many wallet watches in the future.

News of Liquid Meta’s public listing was made official on December 20, when the company received final approval to list its common shares on the. Neo Stock Exchange. With the required liquidity generated by the issuance of 20,349,880 subscription receipts issued at a price of $ 1.00, CEO Jon Wiesblatt called his company’s position: “positioned to build the critical infrastructure to monetize this transition. once in a lifetime ”. Trading is scheduled to begin when the market opens on December 22, 2021 under the symbol LIQD.

At its core, Liquid Meta is building a technology-driven cash-mining company focused on the next generation of blockchain-based protocols, platforms, and applications. The main goal is to scale its operations through consistent fee generation, not necessarily by exposing yourself to the price volatility of the digital assets themselves. This can be achieved in a variety of ways, such as facilitating transactions on decentralized exchanges, extracting liquidity, and peer-to-peer lending. We expect the company to focus from the start on extracting cash (yield farming).

Transactional components of decentralized finance, summarized by 101 Blockchains

The appealing aspect of the DeFi space is that there is no dominant player in the industry, especially on the institutional side. Due to the fragmentation of activity across many blockchains and protocols, it has not been established to tie everything together in a workable interface. Liquid Meta has assembled a comprehensive engineering team that is building proprietary technology to access, automate, and operate over a variety of large-scale DeFi protocols and applications.

Of course, it will not be an easy task. Any platform in place must meet a host of regulatory and security protocols before institutions get started. Key attributes such as asset monitoring, performance analysis, reporting and accounting, pre-trade compliance and network security. But the business is turning in on itself to help solve these challenges quickly.

Prior to building a Rolodex of institutional partnerships, Liquid Meta intends to conduct large-scale cash-extracting operations to help prove its technology platform. Besides the hope of generating cash flow, it serves several important purposes. First of all, it will allow them to build an internal track record of success in extracting liquidity, which can be audited and verified by future partner institutions. Revenue generated from cash mining operations through the variety of protocols and applications will be reinvested to capture higher revenue growth and compound returns on mining operations.

There are few selling points that are more authoritative than a vendor deploying their own capital to validate a proof of concept model. Liquid Meta predicts that success in this area will lead to post-hoc success with institutions seeking to partner with companies with proven track records and technological expertise.

The growth of the DeFi market is fascinating

Ultimately, Liquid Meta believes that the broader trend towards digital assets is secular, and that the infrastructure to create, manage, trade, operate, consume and own digital assets is improving exponentially year on year. . It was born in the numbers, where DeFi is growing at one of the fastest rates that any the financial sector has never known.

For example, a common metric mentioned regarding the growth of DeFi is the Total Locked Value (TVL) across different protocols and applications. TVL is currently US $ 155 billion, up from less than US $ 1 billion in June 2020. This represents an overall growth increase of 11,400% in just eighteen months.

To illustrate how quickly the market is developing, we look no further than the total amount of cryptocurrency held in DeFi over the past 18 months, which has increased astronomically. Although the majority of transactions are currently retail based, it is expected that institutions will dominate transaction volumes once the appropriate frameworks are in place, as is the case today in stock markets. This is the segment of the market in which Liquid Meta seeks to excel.

And while the market has certainly exploded in 2021, some experts believe that the growth of the notional dollar will be even greater next year. Veteran crypto investor Matthew Roszak – whose net worth is around $ 1.5 billion according to Forbes – predicts DeFi may exceed $ 800 billion, implying a 9-fold increase in assets held. While it remains to be seen if this noble prediction comes true, DeFi will almost certainly be much bigger in Q4 2022 than it is today.

In the meantime, the industry’s promise of oversized returns, especially for pioneering trailblazers, has excited investors for the future. A strong debut for the retail DeFi application provider WonderFi Technologies Inc. (NEO: WNDR) (OTCMKTS: WONDF) and strong performance over the current financial year Challenge Technologies Inc. (NEO: DEFI) (OTCMKTS: DEFTF) only increased expectations. And tomorrow morning Liquid Meta Capital Holdings will have its own opportunity to make its mark.

TDR will benefit from additional coverage if events warrant.

Key details

Exchange: NEO

Stock symbol: LIQD

Available funds: $ 23,600,830

Price of the last subscription: $ 1.00

Total Shares, Fully Diluted: 59 109 068

Founding shareholders: Locked up for 12 months; 25% released at 12 months; 25% more released at 18 months; 50% additional released at 24 months. If the 10-day VWAP is CA $ 2.25 or more at any time during trading, 25% can be unlocked.

Shell shareholders (1287413 BC Ltd.): Locked up for 6 months; 50% released at 6 months; 50% additional released at 12 months. If the 10-day VWAP is CA $ 2.25 or more at any time during trading, 50% can be unlocked.

Resulting emitter shared under option: 3,575,754

Listener: Zeifmans LLP

Management team

Jonathan Wiesblatt – CEO and Director

Nicolas del Pino – COO and director

Sendy Shorser – Chief Financial Officer and Corporate Secretary

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