KARMA KARMA P2P lending platform Investor presentation PREMISES - - PowerPoint PPT Presentation

KARMA

P2P lending platform Investor presentation

KARMA

PREMISES

Geographical Imbalance

• In developed countries: loan interest rates are very

low, deposit rates are even negative.

• In developing countries: loan interest rates are very

high, but entrepreneurs cannot get loans even if they accept the conditions.

• According to the World Bank, there is 2.1-2.6 trillion

USD lack of credits in growing markets

• There are more than 1 billion potential investors all
• ver the world and dozens of millions potential

entrepreneurs-borrowers.

• There are trillions of dollars at the investors' disposal

and this money doesn’t work due to the lack of investment opportunities.

• At the same time, entrepreneurs have difficulties

attracting loans for business development.

Investment Imbalance

The 1st cross-border p2p (peer-to-peer) platform using blockchain technology in the world, where investors can directly provide loans to entrepreneurs from SME segment (small and medium enterpreneurs)

KARMA

HIGH-TECH. Deals registration, asset accounting and reputation storage in the blockchain. Smart scoring to reduce default risk. Document e-management with the digital signature use

• PROFITABLE. No intermediaries: it means the higher income for an investor, and lower interest rates for borrowers.

Both parties gain the benefit from the cross-border capital flows: investors from countries with low interest rates provide loans to borrowers from countries with high interest rates

• CONVENIENT. Simple interfaces, personal account, mobile application and e-document management make

communication between an investor and a borrower easier

• SAFE. All transactions are 100% valid for both parties, even if they are from different countries

VIDEO PRESENTATION

BANKS VS P2P PLATFORMS

Banks need a few months to approve the SME loan It takes a few days to make a decision on p2p- platforms Tight standards and numbed requirements for borrowers lead to a great number of lending rejections Investors are more flexible selecting the borrowers allowing more entrepreneurs to raise funds on p2p- platforms Banks prefer to provide secured credits, according to the regulator requirements p2p services work with both secured and unsecured loans It is very risky for SME to receive funds from a single bank or investor Crowdlending (funding from a few private investors) is often used on p2p-platforms Best case scenario is that investors income from deposits covers inflation p2p services help investors and borrowers to contract in mutually beneficial terms

PROSPECTS OF P2P LENDING IN THE WORLD

• Over the past four years, the p2p-lending market

has grown by more than 1000% achieving $119 billion (2018)

• According to Morgan Stanley estimates, this

market will grow to almost $ 300 billion by 2020 and to $ 1 trillion by 2025.

• The loan portfolio of the American p2p-service

Lending Club already amounts $ 35.9 billion, Prosper Funding - $ 8 billion of issued loans. Only in May 2018, the British service Zopa demonstrated an increase of loans volume by €99.2 million.

We propose a brand new model of credit relations

Economy of 18-20th centuries Economy of the future

The investor brings money to the bank, because he is not compitent and sufficiently informed for self-lending.

Investors Borrowers

Investor’s income Cash flow

Bank — center of expertise Economy of 21st century

Marketing Specialist Insurant Lower Analist Realtor Guarantor Collector Appraiser

Participants — center of expertise p2p platform — center of expertise

Investor credits entrepreneur directly, independent peer-to-peer platform provides him expertise Lending becomes transboundary. Expertises pass to independent participants, their efficiency is determined by the rating.

Costs for banks and insurers (30% of GDP) The revenue of centralized p2p platform The revenue is distributed among the decentralized community Investor’s income

Investors Borrowers Investors Borrowers

Investor’s income

COMPETITOR ANALYSIS

Karma is the 1st p2p platform for cross-border lending in fiat. It is cross-border lending that provides access to cheap money to entrepreneurs from countries with high interest rates. Why none of competitors still didn't manage to solve the transborder problem?

PAYBACK IN CASE OF DEFAULT IN ANOTHER COUNTRY. It is quite evident that it is extremely difficult for investor to defend his

interests abroad in case of default. It won't be profitable at all if investor operates small sums.

Our solution. At the time of loan issue, investors will be able to buy an insurance option to sell the loan to the guarantor in case of default for the borrower. The price will be determined beforehand. The discount depends on the borrower's guarantee and reliability. INTERBANK MONEY TRANSFERS. Bank control becomes harder from year to year. Banks request significant packages of documents

for cross-border transfers often declining the transaction. Moreover, settlements under loan agreements are banned in many countries. Our solution. We will effect the cross-border money transfer, due to the blockchain technology. Karma will conduct all operational issues with banks.

EXCHANGE RATE RISK. There is no convenient mechanism for insurance exchange rate risk for small amounts of investments

Our solution. We will create our own fund for currency risk insurance, which will further reinsure risk in international banks.

ORDER RATING SYSTEM

• Charged for useful activities

towards the community

• Good Karma of each

member increases the demand for his services or improves his loan conditions

• Financial condition

assessment

• Work experience and

education

• Project Estimation
• More than 100 parameters of

estimation

• Re-estimation in real-time

mode on a daily basis

• Real-estate, vehicles and

equipment

• Different characteristics for

collateral estimation: liquidity, cover ratio and so on.

• Option for collateral selling in

case of default

REPUTATION (KARMA) SMART SCORING COLLATERAL

• Idea creation
• Testing the market
• Fund-raising for the project

launch

• Establishing the MVP Platform
• Initial product exploitation
• Operational breakeven
• Fund-raising for business

development in 2019

• Implementing the cross-border

functions

• Implementing the currency

hedging

• Launching the project at least in

3 regions besides Russia

• Fund-raising for business

development in 2020

• The platform presence

regions is increasing to 20

• Platform development due to

the sale of franchises and the purchase of local p2p companies

BUSINESS PLAN

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNSTIONAL EXPANSION 2015 2018 2019 2020 2021

Breakeven point

• Token emission based on the

Grаphene blockchain

• Launching the crypto

pawnshop

• Launching MVP Karma 2.0 (fiat loans
• ption):
• a. Market of orders
• b. E-document flow
• c. Routing of payments through

nominal bank account

• Launching own blockchain
• Launching mobile application for

investors

• KRM implementation for service fee
• Implementation of the cross-border

functions

• Implementation of the currency

hedging

• Decentralization of scoring and

analysis

• Online monitoring of borrower’s

financial status

• Expanding the acting parts in the

ecosystem

• Improvement and

modification of functionality

2015 2018 2019 2020 2021

TECHNOLOGICAL PLAN

Breakeven point

LAUNCHING THE PROJECT CREATION OF THE PRODUCT EARLY DEVELOPMENT INTERNSTIONAL EXPANSION

FINANCIAL PLAN

2018 2019 2020 2021

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Operational performance

Volume of transactions, million USD 0,5 3 12 16 21 28 38 50 66 88 117 156 208 276 368 Commission 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

Revenue

Revenue million USD 0,0 0,0 0,1 0,4 0,5 0,6 0,8 1,1 1,5 2,0 2,7 3,5 4,7 6,2 8,3 11,0

Expenses

Expenses, million USD 0,49 0,51 0,55 0,49 0,60 0,74 0,91 1,12 1,38 1,70 2,09 2,57 3,16 3,88 4,78 5,88

Profit, million USD

• 0,49 -0,50 -0,46 -0,13 -0,12 -0,10 -0,06

0,00 0,12 0,30 0,56 0,96 1,53 2,35 3,52 5,15

Operational break-even in Q4 2019 Increase the volume of loans issued by 33% quarterly (conservative forecast) Organize the loans issuance for $ 1 billion in 2021

KARMA TOKEN ECONOMY

• All commissions in the ecosystem are payed on the basis of Karma-token (KRM)
• The average commission is 3% from the transaction
• The more transactions in the ecosystem, the more commission value, the higher demand for KRM
• With basic amount of tokens and growing demand the token price will raise
• Additional options for those with more than 1 000 000 KRM:

✓Priority access to new applications from investors and borrowers ✓50% discount for transactions inside the platform

• Decisions concerning new emissions and key directions for the development are taken on the open vote basis (top 15 delegates of

the network)

Token Issue: 2018 2019 2020 Transaction volume, USD 15 mln 100 mln 300 mln Commission volume, USD 450k 3 mln 9 mln Forecast for economic development: 2018 2019 2020 Volume, USD 7 mln 25 mln 100 mln Price, USD 0,01 0,025 0,1

KARMA NOW

The international community includes 10,000+ people worldwide 2 successful rounds of crowdfunding: $ 0.5 million in August 2017 and $ 10 million in December 2017. More than 2,000 private investors all over the world have supported Karma project The alpha version of the online Karma platform has been launched where test transactions were made recorded in the block and processed with a smart contract Tokens are available on 2 exchanges from Top-10

INFORMATION DISCLOSURE

VIDEO PRESENTATION WHITE PAPER KARMA BLOG 1Q18 PROJECT DEVELOPMENT REPORT 2Q18 DEVELOPMENT REPORT СURRENT BALANCE + EXPENSES REPORT

KARMA FOUNDERS

Artem Laptev Founder, Investment director Since 2010 has managed private p2p-investment fund for SME. Developed own scoring strategy with stable and positive results More than 10 years of portfolio management experience in financial industry: Troika Dialog,

• Sberbank. International CFA-certified financial analyst.

George Goognin Founder, Evangelist Ph.D in Economy Math Models. Vice chairman of the Russian Parliament Blockchain Experts Chamber. IT-career since 2002, first IT-startup made in

• 2008. Ex-Chief Operating Officer in ADV web-integrator, TOP3 in Russia.

Clients: MOEX, VTB, X5 Retail, Apple, Samsung, LEGO, Nike. Co-founder of digital business school RIK, over 1000 students taught.

KARMA TEAM

Software Engineer, C/C++

• developer. Architect of IT
• infrastructure. Highly qualified

expert for high loads and parallel computing. Market data expert. More than 15-years experience as Head of Web Technologies Division Trading and Clearing Systems Center at MOEX. Denis Svinarchuk Evgeny Kovalev Head of Legal Department Dmitry Bolshakov Head of Credit Analysis Department Alexey Opanasenko 17-years working experience in Moscow commercial banks, 12 years

• f them - head of credit

departments: all types of corporate lending and crediting VIP-persons. More than 20 years experience in the

• jurisprudence. For the last 10

years he worked as a Head of legal departments in systemically-important Russian banks. The founder

• f the web service that

automatize legal services. Over 20 years experience of full-stack web-applications development, making site architecture particularly for

• MICEX. Participated in creating
• pen source libraries (ruby and

nodejs). CTO Head of Front-end department

ADDITIONAL INFORMATION

P2P DEVELOPMENT IN RUSSIA 


There is a favorable environment for p2p-lending development in Russia. The bill of alternative ways of fund-raising has been supported by government in 2018

The President of Russian Federation instructed the government to increase the share of SMEs in Russian GDP from 20% to 40% by 2025 According to the Central Bank, the volume of transactions on crowdfunding web-sites in 2017 increased by 85%, exceeding 11 billion rubles. In the next 7 years, the credit need for SMEs will amount from 5 to 10 trillion rubles In 2018, the volume of P2P-lending in Russia will be 24 million dollars. According to forecasts it will grow by 47.8% per year and by 2022 will be 113.4 million dollars.

8 15 23 30

Current volume of p2p credits 2 billion rubles Current volume of SME loans 4.5 trillion rubles SMEs need for development 10 trillion rubles Population deposits in banks 25 trillion rubles

SMEs’ FINANCING

Source: https://www.statista.com/outlook/338/149/marketplace-lending--personal-/russia

Web: karma.red Telegram: t.me/karmaproject Facebook: facebook.com/karma.blockchain/

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