Wayniloans bitcoin lending platform gaining traction in Latin America

Wayniloans is built on a simple premise, get a loan with better terms than the bank, or earn higher returns than stocks and bonds. The Bitcoin based lending platform is less than a year old and has already made almost 600 loans in Argentina, totalling more than 7000 bitcoin.

The company offers three core loan services, cash advance, peer to peer, and business loans, and an array of investment offers for lenders. “Wayniloans has a hybrid model; we work with bitcoins on the back end and loans are given in local currency or dollars, depending on the user’s need,” CEO and Co-Founder, Juan Francisco Salviolo, explained in an interview. “For example, if you are in Argentina you will probably have needs in a local currency or in USD dollar for foreign business.”

Salviolo founded the company with business partner and CFO Matias Wohlgemuth. They’ve both been working in the lending market since 2012. “We deeply understand the problem of financial inclusión because we’ve worked in digital inclusión too. Both sides of the same problem,” Salviolo told BNC.

According to strategic market research firm Euromonitor, more Argentinians are taking out short-term loans while long-term loans like mortgages are down. “Consumers have tended to take advantage of ‘opportunities’ by taking out short-term loans,” the report states. “This behaviour has been more visible among middle-income consumers who have sought an alternative to dealing with inflation and the impact of income tax on their spending.”

However, about 50% of adults in Latin American countries have a traditional bank account, and fewer have access to loans from those banks, according to the World Bank’s global financial inclusion index.

“In Latam 50% of the population does not have credit score history,” Salviolo explains. His company is squarely focused on providing this market with access to finance, “the people who are unbanked and need to build a reputation.”

“In order to make this possible we have a strong partnership with two of the biggest Point of Sales networks. So, the Wayniloans user can cash in or out at the same place he pays his bills.”
— – Juan Francisco Salviolo, Wayniloans CEO and Co-Founder

Lenders have many options on the platform, including a few loans that are guaranteed by Wayniloans at 32% APR. However, the majority of the loans ure not guaranteed, secured against any assets, or lent based on any prior credit history.

For payday loans, the WayniMobile app offers a map showing where the nearest kiosks are located, where users can pick up their pesos from across the country. “WayniMobile is the first mobile app in Argentina which lets you borrow from your phone,” their website says. “The only requirements are creating your user name and upload a photo of your ID and a sharp image of an invoice for a service that is in your name.”

In an attempt to assure lenders on the platform that their loans will be paid back, Wayniloans has implemented a few interesting tactics. First and foremost is a 5% loan origination fee for peer-to-peer loans, payable by the borrower in advance. The assumption is that this will deter opportunists. Lenders, on the other hand, have no fees at all.

The platform is also attempting to tackle the problem with identification. There is a range of secondary online identification options, with which Wayniloans uses to build a risk profile. A grade is provided for each borrower, based on the quality of the supporting documentation. Lenders can also access the information, including social media profiles, to assess the risk themselves.

While this method of identity verification is nothing new, since BTCJam has been using a similar KYC style process since 2012, Wayniloans growth using the framework is remarkable. BTCJam is the oldest competitor in the space, having made 20,226 loans in 131 different countries. The San Francisco-based startup says that they have over 100,000 users and have serviced over $13 million in loans. In January 2015, the company started offering loans to Indian borrowers through Unocoin.

While BTCJam pioneered the format, it took them at least 16 months to attain the business that Wayniloans has achieved in 10. Germany’s BitBond has only accrued one-quarter of Wayniloan’s volume, despite starting out in June 2013. BitLendingClub is also in the market, having facilitated 9923 loans totaling 23566.90 BTC. There’s also the extremely simplistic startup Get Line, which has the fewest rules and restrictions of all. None of Wayniloans competitors are offering payday advance loans at this time.

“Wayniloan combines the best of P2P lending with blockchain technology and bitcoin. The borrowers make loans in the local currency and the investors can earn interest on their savings.”
— – Salviolo

While the platform is currently only available to Argentinian borrowers, anyone with some bitcoin can lend on the platform, and the company plans to extend loans across the region. Saviolo explained that expansion into Mexico and Colombia is in the cards, as is the spread across Latin America. “Since we have a membership program that allows people from different countries to lend Money,” Saviolo added, “we are working to increase the languages range.”

Rootstock’s Demián Sergio Lerner, who originally hails from Argentina, is an official advisor to the project who is helping them investigate using more sophisticated digital assets on the platform too. “We are working with Sergio Lerner and his team in Smart Contract Solutions to have a digital asset to do more scalable and efficient solutions,” Salviolo added. “We are still on an experimental basis.”