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P2P Loans Will Change the Way Credit Is Distributed Globally

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One of the biggest problems we face today is the disconnect between the economy and the people. It's the hard work of everyday people that drives growth, but it's not always the case for people struggling on the ground to reap the benefits. For example, the OECD research points out that the work of the financial sector constitutes 19% of the richest 1%, but the share of finance in overall employment is only 4%. Just like the biased figures surrounding the financial sector, the entire state of the economy is unbalanced and favors people in certain geographies, positions or sectors. And if we could restore balance in the economy and give everyone a fair chance to succeed? What if we could create a system in which people would be able to realize their financial dreams on their own terms? Karma attempts to build a new economic ecosystem that would enable individuals, entities, and professionals around the world to be partners in economic success.

Give credit where credit is due

Credit is synonymous with power in the economies of today. If you have access to credit, you can start a business, finance a school or hospital, start a factory and do a lot more. Lack of credit means dreams and wasted projects. However, for the vast majority of global credit remains an obstacle to overcome. There is also a huge imbalance in the credit structure around the world. In developed countries, there are huge reserves of money in banks at interest rates below zero, zero, or minimal. On the other hand, in developing countries where there is a shortage of credit, loans can only be granted at rates as high as 20-30%. This disparity makes it very difficult for people in developed countries to obtain good returns on their unused money and for people in developing countries to have access to credit on favorable terms that allow them to to create small and medium enterprises. Andrey Kostin, CEO of VTB Group, one of the largest financial holding companies of the CIS recently said at a conference "SME lending is useless for the banks. "

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Banks fail the peoples of the world

SMEs have an important role to play in the development of the global economy. According to Eurostat SMEs account for about 99% of all enterprises. In OECD the only countries SMEs are responsible for the creation of jobs up to 60-70%. However, do these companies get the support of the banking sector that they should get? The founder of Karma and the deputy chairman of the Chamber of Experts of the Blockchain of the Russian Parliament, the example of George Goognin, prove the opposite. He tried to obtain a commercial loan from 23 Russian banks. Banks put conditions such as 200-300% collateral in terms of real estate and bills of exchange. There is even the example of a Russian bank that spent 6 months trying to process a loan to SMEs and eventually gave up. George Goognin tells us, "I had a profitable business with long business contracts and I tried to get an SME loan lower than my 1 year net profit. I called and sent a courier to 23 banks, but no one wanted to speak with me without a 200-300% guarantee in the real estate or securities of the same bank. "

Banks are not doing better in other areas. Since a large number of people from developing countries choose to migrate abroad and send money to their families, banks could provide better services to this population floating. However, what we have normally seen, it is a dismal performance on the part of banks. According to World Bank Remittance Prices Worldwide in September 2017, banks provided the most expensive money transfer services at an average cost of 11%. Banks also need several days to process remittances.

Karma wants to create a better alternative

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The answer to many of the ills that plague the modern economy is in the peer2peer (P2P) loan. Create an economy in which the constituents of economic power hold power. What we need today is a "trust economy". Karma plans to use the blockchain so that individuals as well as legal entities can make the most of profitable relationships with each other. This will involve the creation of a community of participants, who will be able to lend money, borrow money, guard against defaults, note loans and loans. to perform evaluations and even collections. All this will be powered by the Karma token that will be at the center of this new ecosystem. The best part is that Karma will try to remove the strings of geography and allow people all over the world to lend money to other people. The blockchain-based system would be reliable and based on Karma user ratings. In a white paper published by Karma, the jist of the system was explained as "The task of Karma is to create an ecosystem with a rich variety of relationships among participants. will have the opportunity to exchange their available resources directly with other people, with or without interest, for a period of time to be determined by peers. "

Engaging People to Build the Ecosystem

Karmas engage ordinary investors to build this economic ecosystem of the future. A symbolic sale is underway between November 27 and 29, 2017. The first two days of the symbolic sale, November 27 and 28, the sale is open to investors who know your customer (KYC) and who were added to the whitelist. If there are any chips left these days, they will go on sale November 29 at an open sale. The sale of Karma chips is legal in all jurisdictions, including the United States and China. Qualified US investors can participate. The base price of Karma Token is US $ 0.01. Early investors can get discounts of 50% up to 1 million US dollars, then 30% discount up to US $ 3 million are collected and 15% up to 1 million US dollars. at US $ 8 mln are collected. There is a cap of 10 million US dollars on the sale of chips.

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The Karma Token will be used for commissions on activities such as logging, transaction processing, insurance collections, and so on. Karma tokens will stay fixed and more people will use Karma tokens and buy them. the conduct of transactions, the scarcity should result in the higher price. Token holders will have priority access to new apps if they hold more than 100,000 tokens and can receive 50% discount on completing transactions on the Karma platform.

Karma is about common sense

Giving people access to cheap credit makes no sense. The road adopted by Karma is only one step in this direction. To start a project on this scale, it would be necessary for the whole world to involve it. Yet each journey begins with the first step. The selling of chips for Karma is this step. They plan to launch an alpha version as early as November 2017, which would allow p2p loans in the form of crypto pawnshop where USD loans would be available against BTC / ETH guarantees and SME guaranteed loans. Can karma change our vision of money, banking, and finance? It will not take long to find out.