RE: Dharma Protocol: Tokenized Debt and Funding Through Decentralized Systems
I need to look into Steem leasing more, but I believe the demand as well as supply is insufficient for something like that take off.
There are tens of millions of SP leased and the rates tend to stay between 18-22% ROI.
7% is not cheap in the US for small business loans. And really not cheap for the type of business that needs cash quickly. I get 24-36% for loans that are used to fill purchase orders. They are designed to be short term 30-90 day loans and the people need cash now to purchase materials or inventory. Anyways lets just say I know way to much about business finance to think 7% interest rates are even kind of a good rate. Heck many fortune 500 companies are paying higher then that rate for their loans.
There are also massive regulatory issues of offering high risk lending opportunities to people who aren't financially educated to understand the risk factors.
Thank you for the insight @pifc
As I said, 7% is great for emerging markets. And it was just an example. As I said, loans will be based on various risk factors. And of course, companies are always free to go through the traditional route if they feel it is more advantageous.
Geography will be a huge part of the risk. The economy of the country the borrower is from will play a role in their potential cash flows. In a country like the USA, the premium will not exist. Where as in India or Poland, it most definitely will.
This is based on the fixed income concept of "country risk premium".
I will start looking into the potential of Steem in this process.
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