Ending predatory lending one loan at a time.

Sample Contract

Documentation and contract

This is the contract and documentation we currently send to borrowers and their attorneys. We welcome comments and want suggestions of how to simplify and improve this documentation so that it is fair and clear to borrowers.

Contract Worksheet

Worksheet for determining contract (loan) balance due

This is the worksheet we use to price our contacts (loans), i.e., it is what we use to calculate the pay-off value of each contact on any given day. We calculate the interest due on each contract to the day: there are no six-month cliffs in our contracts. Administrative costs for each loan are amortized daily - we are experimenting with different amortization schedules and are currently amortizing these costs over 365 days.

Loan Data

Summary of Loans Made (to Date)

This table summarizes the contracts (loans) we have made. Data includes contract size, the administration fee on on each loan, the actual interest to be paid to investors on each loan (for contracts that have been closed) and the assumed interest paid to investors (if the contract were to be closed on the report date). Also included is the length of each contract (as of the report date) and data on any defaults (so far, so good: zero defaults to date).

Loan Loss Math Worksheet

Loan Loss Math Worksheet

This worksheet generates a table which shows the gross interest rate required on a basket of loans based on a range of default rates. Users enter key assumptions (e.g., required net investor return, loan administrative costs, average contract length) in order to generate the table. A key takeaway from working with this spreadsheet is that when it comes to short-term micro loans, low interest rates for borrowers are predicated on achieving low default rates coupled with low administrative costs.


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