How Debitum Network is making global business loans a fast and flexible investment option
Thanks to technologies like blockchain, the pace of investment is faster than ever. But with many smaller investors looking for a less volatile alternative to cryptocurrency trading, alternative finance (AF) providers such as Debitum Network are emerging as a smarter choice for those looking to balance their investments.
Diversification and flexibility will be key in 2019 – and these are the four trends small investors can’t afford to ignore:
Become a lender
For those in search of more predictable returns – or simply wanting to rebalance their investment portfolio – investing in small business loans can deliver a significant benefit: returns come in the form of regular interest payments, rather than relying on the performance of stocks, or on currency or commodity prices.
Until recently, however, becoming a lender wasn’t an option for most small investors. Traditionally, lenders needed to be registered as a bank or financial institution, a lengthy and bureaucratic process. Alternative finance options such as crowdfunding and microfinance have changed that – but Debitum Network takes things a step further.
Debitum Network allows investors of all sizes to fund short-term loans to small businesses. Where Debitum differs from other AF providers is that it provides a total ecosystem for investors, including service providers such as insurers, risk assessors and debt collectors. In doing so, Debitum provides small investors with many of the tools large institutional lenders use to safeguard their investments. By enabling investors to provide loans directly to small businesses worldwide, Debitum Network is helping to power sustainable growth in developing markets.
Until recently, most lending took place between lenders and borrowers located in the same country or market. Practicalities such as money transfer mechanisms and the difficulties of meeting, assessing risks and negotiating a loan agreement made cross-border lending difficult. Debitum Network’s self-contained ecosystem makes it easy for investors of all sizes to make loans to businesses around the world – all managed from the investor’s easy online dashboard
Lending globally gives investors the chance to look beyond their home market. With interest rates in most developed economies relatively low, loan investments offer relatively modest returns. In developing markets, interest rates are generally higher – with Debitum Network delivering returns for small investors of 15%.
Small business loans represent a growing opportunity for investors. According to the World Bank, as many as 70% of small businesses are unable to secure the finance they need from the traditional banking sector – providing a market that is estimated to reach as much as $90 billion USD in 2020, from its current figure of $34 billion.
Get the bigger picture about blockchain
Blockchain has been a buzzword in investment circles for several years now – but there’s more to blockchain technology than Bitcoin and cryptocurrency trading. Debitum Network allows investors to explore other benefits of the decentralised technology, which makes investing faster, easier and more reliable.
Debitum’s unique hybrid model uses its own Ethereum-based DEB token to power its internal processes, while delivering loans in traditional fiat currency. This means investors can take advantage of the transparency and security offered by blockchain, together with smart contracts that enable loans of up to 1 million EUR to be delivered in as little as an hour – ensuring their money gets to work fast.
After a big year for the stock market in 2017, there are indications that the crypto market may be slowing down. Smarter investors are looking to rebalance their portfolios – and that means staying flexible.
Debitum Network allows investors to spread their money. Individual investments don’t require a huge stake – investors can begin with as little as 50 EUR. And unlike traditional lending, investors don’t need to fund the whole of a loan amount themselves. They can opt to fund a part of the borrower’s total loan amount, enabling them to co- fund multiple loans with other investors. Short-term loans on Debitum Network mature between 2 and 6 months, providing investors with the flexibility they need without tying up money in the long term.