Private Credit
Tokenized lending pools for licensed financial institutions, offering fixed yields for lenders while ensuring regulatory compliance through fiat-based transactions.
Last updated
Tokenized lending pools for licensed financial institutions, offering fixed yields for lenders while ensuring regulatory compliance through fiat-based transactions.
Last updated
Credible introduces a specialized loan product designed for licensed lending institutions and debt funds rated by Credora. This product aims to enhance liquidity while ensuring robust risk management through structured lending practices. The innovative use of synthetic debentures as collateral, combined with comprehensive compliance measures, positions this offering as a reliable solution for institutional lending. This document outlines the features, benefits, and operational mechanics of this product.
Credible’s loan product for Credora-rated licensed lending institutions and debt funds represents a significant advancement in institutional lending solutions. By combining security through rigorous assessments, innovative use of synthetic debentures, and a commitment to compliance, this product enhances liquidity and fosters a stable lending environment. This offers a seamless and regulated approach to providing debt financing to licensed financial institutions, such as Non-Banking Financial Institutions (NBFIs) and debt funds, through tokenized lending pools. This process ensures secure liquidity, fixed yields for lenders, and compliance with local regulations. Below is a step-by-step overview of Credible’s debt financing process for financial institutions.
Credible partners with licensed financial institutions, such as NBFIs or debt funds, to identify viable lending opportunities. These institutions are vetted based on their need for capital and their ability to comply with local regulations.
Once a potential financial institution is identified, Credora provides a comprehensive credit assessment and assigns a rating to evaluate the financial institution’s creditworthiness. This report helps mitigate risk for investors and ensures the institution meets Credible’s eligibility criteria.
If the financial institution passes the credit assessment, Credible partners with the institution and integrates its fintech systems using Credible’s SDK and APIs. This integration streamlines the lending process and facilitates efficient communication between the institution and Credible's platform.
Credible sets up a lending pool for the financial institution, based on the approved borrowing capacity determined by Credible’s risk assessment and credit policies. This lending pool enables multiple lenders to provide liquidity in exchange for fixed yields.
Whitelisted lenders can participate in the lending pool by adding liquidity, which enables them to earn fixed yields. The lending pool provides a secure investment vehicle, ensuring that capital is used efficiently by the financial institution.
Once sufficient liquidity is added to the pool, the borrower, or Credible’s Special Purpose Vehicle (SPV), withdraws the loaned capital. The funds are converted into USD fiat and transferred to the financial institution’s bank account, ensuring that the institution does not have exposure to crypto assets and complies with local financial regulations.
The licensed financial institution makes scheduled repayments on the borrowed amount to either Credible’s SPV or directly in USDC to the lending pool. Lenders can withdraw interest payments from the pool as per the repayment schedule. At the end of the loan tenure, the borrower repays the principal amount, which is also made available to lenders for withdrawal in USDC or through the SPV.
Multiple fintech companies can integrate with Credible's SDK and APIs, enabling them to provide capital via local NBFI channels. This framework allows fintech platforms to access regulated lending markets and offer their customers more flexible funding options. Currently, Credible’s NBFI lending solution is live in India, with plans to launch soon in the UAE. This debt financing process enables secure, regulated, and efficient access to capital for financial institutions while providing fixed-yield opportunities for investors.
