This interview is part of our new Blockchain In Lending series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and lending.
In this interview we speak with Radoslav Albrecht, CEO and Founder of Bitbond, to understand how his company is using blockchain to transform the lending business, and what the future of the industry holds.
1. What’s the story behind Bitbond? Why and how did you begin?
RA: I founded Bitbond with the vision for the first truly global marketplace lending platform for business loans. In my previous jobs, I worked in banking and management consulting, seeing how inefficient the lending processes are with banks. I wanted to change that. Today we’re originating loans in Europe, the Americas and select African and Asian countries. We enable cross-border lending using blockchain technology for payments and machine learning / cash flow based credit underwriting. Bitbond has its own BaFin (the German financial regulator) license since 2016 and since inception, we raised $6 million in equity and originated $15 million in loan volume.
2. Please describe your use case and how Bitbond uses blockchain:
RA: Many small and medium sized businesses around the globe face a severe funding gap. Even if these clients are profitable and growing, traditional banks often refuse to serve them due to the small profit margins that small business loans entail. By leveraging technology to make cost-intensive lending and payment processes more efficient, we tackle the SME funding gap and support the growth of aspiring small businesses.
In order to make cross-border payments efficient, we send payments via the bitcoin and the Stellar blockchain. We have integrated with payment partners like TEMPO France so that our customers can use their bank account to make payments. However, in the backend we replace the SWIFT system with a much faster and more efficient alternative. Today we primarily use EUR-Tokens (stablecoins) on top of the Stellar blockchain.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
RA: Our ideal target customers are e-commerce businesses due to the possibility to connect, as part of their application, platforms such as Amazon, Ebay, PayPal. However, we are currently working with both online and offline businesses (e.g. restaurants, consultancies, freelancers etc.)
Small businesses around the world have huge difficulties getting a loan from a bank and even if they do the application process and length is very exhausting, especially when they need capital to grow their businesses as soon as possible.
With Bitbond, borrowers apply conveniently using online data. Our online application takes only 15 Minutes and within 24 hours the borrowers receive a personalised rating. The loan can then be paid out immediately and repaid securely via blockchain, integrated with local bank accounts.
4. What other blockchain lending use cases are you excited about?
RA: Crypto-backed loans where certain cryptocurrencies are being accepted as collateral are a very interesting use case. Currently it’s a relatively small market but I’m very curious how it will develop.
5. Where will Bitbond be in five years?
RA: Our mission is to make investing and financing globally accessible. We will continue to make this happen. We strive to become the market leader in SME lending and to provide superior investment solutions.
Additionally we just launched Germany’s first Security Token Offering. This is the first bond in Germany, where the proof of ownership exclusively happens via a digital blockchain based token. With the offering we’re gaining a lot of experience in the tokenization of assets. Many companies have approached us asking whether they could use our technology and so we started to white-label it for other issuers as it fits into our mission. I believe that tokenization will play a big role and we will be part of this financial markets revolution.