Welcome to Joltify
  • Introduction To JOLTIFY
  • Real World Asset Lending
    • Background
    • Business Model In JOLTIFY
      • Tokenize Document To NFTs
      • NFT Ownership Transfer
      • Token Economics
    • Utilization of JOLTIFY In Different lending Environments
    • Project-Based Lending
      • Use Case: A Solar Farm Financed By JOLTIFY
    • Investment Pool Processes and Rules
  • Asset-Based Lending
    • A Commercial Development Asset-Based Loan Within The JOLTIFY network
  • Cash Flow-Based Lending
    • Cash Flow-Based Loan In JOLTIFY To Help A Car Company Grow Its Business
  • Digital Asset Lending
    • Backgound
    • Joltify Digital Asset Lending
    • Market
    • Liquidation
  • Jolt Buy-Back And Burn
    • Jolt Buy-Back And Burn
  • Joltify Techs
    • JOLTIFY Chain Techs
      • Validator Election & Punishment
      • JOLTIFY Chain Bridge
    • Development on Joltify EVM
      • Configuration
      • Token Conversion
      • Development Tutorial
    • Nodes and Validators
      • Requirements
      • Joltify Installer
      • Run a Fullnode
      • Become a Validator
    • Endpoints
    • Connection
  • Joltify Testnet
    • Get Ready
    • Swap & Digital Lending
    • JOLT Buyback-Burn
    • RWA Lending
      • Role Introduction
      • Investor Guideline
      • Notation Explanation
      • Investing Timeline
    • Cross-Chain Bridge
    • Joltify IBC Transfers
  • Joltify Point System
    • Introduction
    • Invitation Mechanism
    • Basic Missions
    • Testnet Missions
    • Mainnet Missions (Coming soon)
    • Discord Role Claim
    • Partner Missions (Coming soon)
  • Term of Use
    • TERMS AND CONDITIONS OF USE FOR BORROWERS AND ISSUERS
    • WEBSITE, JOLTIFY PROTOCOL AND JOLTIFY CHAIN TERMS AND CONDITIONS OF USE
    • PRIVACY POLICY
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On this page
  • Transformation For The Traditional Financial Market
  • The Huge Trade Finance Gap
  • Huge Credit Gap In The Traditional Financial World
  1. Real World Asset Lending

Background

Transformation For The Traditional Financial Market

Technologies have reshaped the world, especially so, in the last two decades. Its innovation and accessibility has transformed our society. It changes the way people communicate, learn, think and live. We’ve seen the rise of Fintech technology and the inception of AI. Despite this, the financial world seems to continue with elements of its archaic past, it seems that the lending world has currently failed to evolve. Large institutions continue to dominate the market. Large businesses have been served well to the liquid markets with the cost of capital as low as an average of 1%. SMEs, however, still have to pay as high as 15% for the borrowing cost while non-performing loans as low as an average of 2%.

The Huge Trade Finance Gap

  • Trade finance is a stable, established asset class that supports sustainable development.

  • According to the 2019 ICC report, global trade finance transactions have low default rates below 1% and corporate lending is statistically riskier than trade finance lending.

  • A centuries-old global market traditionally dominated by commercial banks is now opening up to institutional investors.

  • This growing market offers lenders opportunities for yield pick-up and diversification benefits.

  • Global trade now faces a $3.4 trillion financing gap according to one CNBC article.

Huge Credit Gap In The Traditional Financial World

  • The global market opportunity for SMEs (Small and Medium-Sized Enterprises) credit is estimated to be $8 trillion, but more than half of it goes unmet.

  • Traditionally, SMEs are generally hard to secure finance from banks due to various reasons such as: a lack of security, a lack of track record, taking too long to make a decision, disengagement etc.

  • With the rise of digital technologies, there has been a vast increase in the opportunities to capitalize on SME lending, as we progress we foresee the opportunities becoming safer and more accessible.

  • SMEs represent more than 95% of registered firms worldwide.

  • SMEs account for more than 50% of jobs worldwide.

  • In high-income countries, they contribute to 50% of GDP and are responsible for over 60% of employment.

  • It is calculated that between 55% to 68% of formal SMEs in emerging markets are either unserved or underserved by financial institutions.

  • The International Finance Corporation (IFC) estimates that SMEs in developing countries, alone, have an unmet financing need of $5.2 trillion every year.

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Last updated 3 years ago