KARMA KARMA P2P lending platform Investor presentation
PREMISES Investment Imbalance Geographical Imbalance • There are more than 1 billion potential investors all • In developed countries: loan interest rates are very over the world and dozens of millions potential low, deposit rates are even negative. entrepreneurs-borrowers. • In developing countries: loan interest rates are very • There are trillions of dollars at the investors' disposal high, but entrepreneurs cannot get loans even if and this money doesn’t work due to the lack of they accept the conditions. investment opportunities. • According to the World Bank, there is 2.1-2.6 trillion • At the same time, entrepreneurs have difficulties USD lack of credits in growing markets attracting loans for business development.
KARMA The 1st cross-border p2p (peer-to-peer) platform using blockchain technology in the world, where investors can directly provide loans to entrepreneurs from SME segment (small and medium enterpreneurs) VIDEO PRESENTATION HIGH-TECH. Deals registration, asset accounting and reputation storage in the blockchain. Smart scoring to reduce default risk. Document e-management with the digital signature use PROFITABLE. No intermediaries: it means the higher income for an investor, and lower interest rates for borrowers. Both parties gain the benefit from the cross-border capital flows: investors from countries with low interest rates provide loans to borrowers from countries with high interest rates SAFE. All transactions are 100% valid for both parties, even if they are from different countries CONVENIENT. Simple interfaces, personal account, mobile application and e-document management make communication between an investor and a borrower easier
BANKS VS P2P PLATFORMS Banks need a few months to approve the SME It takes a few days to make a decision on p2p- loan platforms Best case scenario is that investors income from p2p services help investors and borrowers to deposits covers inflation contract in mutually beneficial terms Banks prefer to provide secured credits, p2p services work with both secured and according to the regulator requirements unsecured loans It is very risky for SME to receive funds from Crowdlending (funding from a few private a single bank or investor investors) is often used on p2p-platforms Tight standards and numbed requirements for Investors are more flexible selecting the borrowers borrowers lead to a great number of lending allowing more entrepreneurs to raise funds on p2p- rejections platforms
PROSPECTS OF P2P LENDING IN THE WORLD • Over the past four years, the p2p-lending market has grown by more than 1000% achieving $119 billion (2018) • According to Morgan Stanley estimates, this market will grow to almost $ 300 billion by 2020 and to $ 1 trillion by 2025. • The loan portfolio of the American p2p-service Lending Club already amounts $ 35.9 billion, Prosper Funding - $ 8 billion of issued loans. Only in May 2018, the British service Zopa demonstrated an increase of loans volume by € 99.2 million.
We propose a brand new model of credit relations
Costs for banks and insurers (30% of GDP) Economy of 18-20th Cash flow Investor’s income centuries Bank — center of expertise Borrowers Investors The investor brings money to the bank, because he is not compitent and sufficiently informed for self-lending. The revenue of centralized p2p platform p2p platform — center of expertise Economy of 21st century Investor’s income Borrowers Investors Investor credits entrepreneur directly, independent peer-to-peer platform provides him expertise The revenue is distributed among the decentralized community Analist Realtor Lower Marketing Specialist Appraiser Guarantor Insurant Collector Participants — center of expertise Economy of the future Investor’s income Borrowers Investors Lending becomes transboundary. Expertises pass to independent participants, their efficiency is determined by the rating.
COMPETITOR ANALYSIS Karma is the 1st p2p platform for cross-border lending in fiat. It is cross-border lending that provides access to cheap money to entrepreneurs from countries with high interest rates. Why none of competitors still didn't manage to solve the transborder problem? INTERBANK MONEY TRANSFERS. Bank control becomes harder from year to year. Banks request significant packages of documents for cross-border transfers often declining the transaction. Moreover, settlements under loan agreements are banned in many countries. Our solution. We will effect the cross-border money transfer, due to the blockchain technology. Karma will conduct all operational issues with banks. EXCHANGE RATE RISK. There is no convenient mechanism for insurance exchange rate risk for small amounts of investments Our solution. We will create our own fund for currency risk insurance, which will further reinsure risk in international banks. PAYBACK IN CASE OF DEFAULT IN ANOTHER COUNTRY. It is quite evident that it is extremely difficult for investor to defend his interests abroad in case of default. It won't be profitable at all if investor operates small sums. Our solution. At the time of loan issue, investors will be able to buy an insurance option to sell the loan to the guarantor in case of default for the borrower. The price will be determined beforehand. The discount depends on the borrower's guarantee and reliability.
ORDER RATING SYSTEM REPUTATION (KARMA) SMART SCORING COLLATERAL • Charged for useful activities • Financial condition • Real-estate, vehicles and towards the community assessment equipment • Good Karma of each • Work experience and • Different characteristics for member increases the education collateral estimation: liquidity, demand for his services or • Project Estimation cover ratio and so on. improves his loan conditions • More than 100 parameters of • Option for collateral selling in estimation case of default • Re-estimation in real-time mode on a daily basis
BUSINESS PLAN Breakeven point INTERNSTIONAL EXPANSION LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT 2015 2018 2019 2020 2021 • Idea creation • Establishing the MVP Platform • Implementing the cross-border • The platform presence • Testing the market • Initial product exploitation functions regions is increasing to 20 • Fund-raising for the project • Operational breakeven • Implementing the currency • Platform development due to launch • Fund-raising for business hedging the sale of franchises and the development in 2019 • Launching the project at least in purchase of local p2p 3 regions besides Russia companies • Fund-raising for business development in 2020
TECHNOLOGICAL PLAN Breakeven point INTERNSTIONAL EXPANSION LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT 2015 2018 2019 2020 2021 • Token emission based on the • Launching MVP Karma 2.0 (fiat loans • Implementation of the cross-border • Improvement and Gr а phene blockchain option): functions modification of functionality • Launching the crypto a. Market of orders • Implementation of the currency pawnshop b. E-document flow hedging c. Routing of payments through • Decentralization of scoring and nominal bank account analysis • Launching own blockchain • Online monitoring of borrower’s • Launching mobile application for financial status investors • Expanding the acting parts in the • KRM implementation for service fee ecosystem
FINANCIAL PLAN Operational break-even in Q4 2019 Increase the volume of loans issued by 33% quarterly (conservative forecast) Organize the loans issuance for $ 1 billion in 2021 2018 2019 2020 2021 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Operational performance Volume of transactions, million USD 0 0,5 3 12 16 21 28 38 50 66 88 117 156 208 276 368 Commission 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Revenue Revenue million USD 0,0 0,0 0,1 0,4 0,5 0,6 0,8 1,1 1,5 2,0 2,7 3,5 4,7 6,2 8,3 11,0 Expenses Expenses, million USD 0,49 0,51 0,55 0,49 0,60 0,74 0,91 1,12 1,38 1,70 2,09 2,57 3,16 3,88 4,78 5,88 -0,49 -0,50 -0,46 -0,13 -0,12 -0,10 -0,06 0,00 0,12 0,30 0,56 0,96 1,53 2,35 3,52 5,15 Profit, million USD
KARMA TOKEN ECONOMY • All commissions in the ecosystem are payed on the basis of Karma-token (KRM) • The average commission is 3% from the transaction • The more transactions in the ecosystem, the more commission value, the higher demand for KRM • With basic amount of tokens and growing demand the token price will raise • Additional options for those with more than 1 000 000 KRM: ✓ Priority access to new applications from investors and borrowers ✓ 50% discount for transactions inside the platform • Decisions concerning new emissions and key directions for the development are taken on the open vote basis (top 15 delegates of the network) Forecast for economic development: Token Issue: 2018 2019 2020 2018 2019 2020 Transaction volume, USD 15 mln 100 mln 300 mln Volume, USD 7 mln 25 mln 100 mln Commission volume, USD 450k 3 mln 9 mln Price, USD 0,01 0,025 0,1
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