If you are an owner or a manager of a small or medium business and have tried to get a loan from a bank, you may have faced problems. You have to prepare a lot of documents, go through the bureaucracy and then, most likely, get rejected.
From 50% (in the US) to 70% (in developing countries) of SMEs are underfinanced in one way or another – i.e. they cannot get a loan at all, or a loan is only partly approved. The shortage of SMEs financing in the world ranges from $3.1 trln to $3.8 trln (in developing countries – from $2.1 trln to $2.5 trln).
Launch of free services for entrepreneurs.
Launch of the finolog.ru financial accounting service
Development and improvement of the finolog.ru features. Integration with the TOP 4 bank in Russia.
Launch of the University of Finolog and courses for entrepreneurs. 30,000+ people attended the courses. Finolog reached the operational break-even point.
Implementation of the features for accounting liabilities and automation of sales.
Start of the Finolog 2.0 Platform project, concept development, preparation of documentation, start of fundraising.
The development plan relies on raising a Hard Cap. Tokenholders can vote for the priorities in the development stages and for the selected features.
Ranking of the financial management efficiency: calculation of the financial ranking based on data received from the bank API. Such metrics as CF, PnL, Balance, ROE, ROA and others, as well as their derivatives, are taken as a basis.
Recording the history of the change in the ranking of the financial management efficiency to blockchain.
Personal account for platform participants and billing in tokens, which allows payments for platform services and payments for services of data consumers and services that enrich data.
Integration with banks. The target KPI depends on the number of countries of presence: We prepare solutions for banks with PSD2 and banks in Asia that are ready to provide data via API, and also develop 3-4 ready-made connectors to major banks that require specific implementation of extracts.
Launch of the short-term P2P lending platform: building a "social" graph of the company, specifying lending limits they set for counterparties and counterparties set for them, a feature of transferability of trust.
Recording transactions of mutual lending to blockchain.
A marketplace for long-term lending: an SME segmentation feature and the possibility of impersonal preliminary scoring of potential borrowers by banks to select companies for which they are willing to preapprove a loan.
Enhanced service for counterparty verification.
Marketplace for data: API for services and data, query constructor and segmentation taking the enriched data into account.
SDK for major platforms and development tools.
Sandbox for tests where third-party developers can start testing their services on real data.
Paying for data and scoring with tokens.
Marketplace for services: marketplace for services with deep integration. Billing for external services: services can accept payment with FNLG tokens.
Verification of all services.
Advanced API for services.
Emergence of the first services on the platform: constructor of public indices and ratings (for example, top 10 coffee houses in Bangkok)
Integration with data enrichment services: CRM, management accounting, analytics, and litigation systems, etc.
100,000+ registered companies in the system by the end of 2019, of which at least 10,000 used paid services of the platform.
Since tokenholders can vote for the prioritization in the features, it is impossible to accurately predict the development stages. We see the following blocks as important for the system features and are going to implement them in 2020-2021:
Loan tokenization, secondary market for tokenized loans.
Creation of investment clubs on the platform.
Smart contacts for constituent contracts.
The platform is expected to have 1 million registered SMEs by the end of 2020, at least 100,000 of them use the paid features of the system.
The platform is expected to have 10 million registered SMEs by the end of 2021, at least 1,000,000 of them use the paid features of the system.
The budget structure depends on the size of the funds raised. With a small amount of funds raised, we will enter fewer markets and spend less money on marketing at the initial stage. With a large amount of funds raised, we will enter more markets simultaneously and invest more in marketing to accelerate the platform growth.
Developers do not receive all the funds at the end of fundraising
Within DAICO, the funds raised are stored in a decentralized way and fully secure manner. The crowdsale terms are completely transparent and are spelled out in a smart contract.
Tokenholders control the funds receipt
“Tap” is a key variable of a smart contract. The tap defines the amount of ETH per second received by the developers.
If the team needs to raise more funds to accelerate the project development, it sends a request to tokenholders to "open the tap." If the arguments are convincing, tokenholders increase the money flow.
Funds can be returned
Tokenholders can vote for the DAICO shutdown and return the remainder of their investments.
Mikhail Saakashvili is a fan of SMEs development, which he considers the basis for the prosperity of the economy. He created all the conditions for the rapid development of SMEs in Georgia, but after his presidency, the three largest banks associated with the new government began to dominate in the Georgian economy. He believes that the modern banking system is an outdated, inefficient and artificially created oligopoly for the distribution of resources in the economy, which allows the concentration of all resources in the hands of a few.
Mikhail also eliminated red tape in the state, simplifying the procedures and processes of approval, and simply terminated the countless supervising bodies consisting of parasites engaged in pure extortion from entrepreneurs. Due to this measure, Georgia took the 9th place out of 190 possible in the Doing Business ranking of the World Bank.
We contacted Mikhail through mutual friends, told him about Finolog 2.0 and our main goal, and asked him to support our project. Mikhail enthusiastically agreed to support us at our very first meeting after having learned more details about our project, without any conditions and without demanding any compensation for his support (what a rarity in the current cryptoworld, isn’t it?)
99.7% of the 400 mln registered companies in the world are small and medium businesses, and 70% of them have no access to bank loans.
If our fee is 2% of the transaction amount, the average transaction amount is $10 thous., and we cover 50% of small and medium businesses (which cannot get a bank loan), and each company conducts at least one transaction per year through our system, our annual commission will be $40 bln.
At the moment, companies solve this problem by lending to each other under the terms of delivery with a deferred payment ("I will provide you a product or a service now, and you will pay later"). In fact, entrepreneurs act as a microlending bureau, calculating and setting credit limits for their partners.
Restrictions: this only works with trusted counterparts with a long history of relationships and does not work with new partners.
We allow trust to spread as a chain. If I trust you, and you trust your counterparty, it means that I can trust them too, with your guarantees. If we are ready to cooperate with you on deliveries with a deferred payment, and you cooperate with your partner under the same terms, it means that I can provide your partner with goods or services on a deferred payment with your guarantees.
We are building a social network for small and medium businesses where the company's "friends" are its business partners and each partner has a "level of trust" (the maximum number of products/services the company is willing to provide with a deferred payment). When the company claims that it is in search of a new partner, our system automatically searches for a way between the company and potential suppliers and sends a request for participation in the transaction to existing counterparties, as well as a request for the amount of the fee the guarantors (intermediate links of the chain) demand for their services.
Companies are interested in attracting their partners on the platform. If a business owner is interested in increasing sales or looking for new suppliers willing to lend goods or services to their business, they need to specify a lending limit. In their turn, potential partners also indicate their lending limits. If the company does not specify its lending limit, the system will not be able to select partners for it. As such, the idea will spread in a viral way.
Umbrella-type model of attracting customers
Fintech startups usually have to pay for each attracted customer, so the total funding budget is about $200-300 mln. Instead of attracting customers one by one, we will use the opportunities of large companies, which already have channels of distribution and sales to thousands of customers. This will allow us to significantly reduce not only the cost of attracting customers, but also the overall budget (our hard cap is $20 mln).