Introduction

Two billion people, about 40% of the global population, are still unbanked or underbanked and cannot get access to affordable credit, even if they have well-paying jobs and are connected to the Internet. Despite Despite making our global economy hum, the financial services industry today is fraught with problems that make it more exclusive than it is inclusive. For one, it is arguably one of the most centralized industries in the world, and also the last industry to feel the transformative effects of the technological revolution. Bastions of the old financial order such as banks go to great lengths to defend monopolies and often hinder innovations that might be disruptive to their businesses. The financial system also runs on outmoded technology and is governed by regulations dating back to the nineteenth century.

Problem

In developed countries whether you’re applying for your first credit card or seeking a loan, the lending company will value one number above all else: your credit score. This number is meant to reflect your creditworthiness and therefore your risk of default. It is the amalgamation of a number of inputs, from how long you’ve borrowed to your payment track record. While most credit depends on it, most emerging markets lack central credit scores.  First, it is incredibly narrow. A young person with no credit history might have a sterling reputation, a track record of fulfilling commitments or a rich family member.

Solution

PawnHero utilizes Magnus, which is a proprietary loan pricing model we developed to price the pawn loans it grants to its customers. Magnus prices loans to realize an expected return on loan capital of 2.99% per month through interest income and the probable gain on sale of the pledged items should the loan default. The model determines the appropriate Loan to Value ratio (LTV) for each loan based on the current market value of the pledged item, the term of the loan, the expected default probability, the forecast depreciation, and the estimated time to sell the pledged item. Magnus utilizes historical data from past loans together with publicly available information scraped scraped from the internet. The model is updated regularly to iterate towards the optimal pricing of pledged loans.

Hero Token

Hero Token (Symbol HERO) – The Future of Banking in Southeast Asia
The amount of tokens that are created for the Hero chain are all dependent on how many coins are sold during the token sale. A maximum of 250,000 Ethereum (ETH) tokens will be accepted for the purchase of Hero tokens in this token sale. The maximum amount contributed will in turn represent 80% of all Hero tokens. Since we don’t know the total that will be sold, the token sale operates based off of percentages to ensure fairness for all. Should the maximum amount be reached prior to the end of the sale on TBD, which is 4 weeks after the start of the token sale, we will cut off the token sale.

For more information about Hero access the link whitepaper and HERO.