Ripple, one of the fastest-growing Fintech startups worth billions of dollars, and owners of XRP, the fourth most valuable crypto by market value, recently disclosed that it was branching out into the lending business.
The report spoke on the barriers associated with many businesses accessing credit and why it felt it necessary to solve such pressing needs by highlighting the following:
- Limited access to working capital is one of the biggest barriers to growth for many companies.
- Unlike incumbents who have large balance sheets that allow them to scale their businesses quickly, many Fintechs and small and medium-sized enterprises (SMEs) lack the capital and resources to compete.
- Faced with stalled growth, customers turn to create bespoke credit arrangements – with each partner, in each destination market. Each arrangement requires additional overhead and management, making it a slow, burdensome, and ultimately inefficient process.
- Ripple’s Line of Credit solves this problem for its customers by providing upfront access to capital for every market through one simple credit arrangement – simplifying access to financial solutions that accelerate business performance and scale.
Hint: Ripple has about 6.2 billion XRP, worth over $1.5 billion at prevailing market prices. Its accounts reserve is responsible for 6% of XRP’s total supply when considering both the 45 billion in circulation and 48.6 billion held in escrow accounts. The Ripple periodically sells XRP into the crypto-verse.
The report further gave operational details on how Ripple will enforce such program and the edge it holds:
- Those using ODL on RippleNet can purchase XRP from Ripple on credit—customers are charged one fee on the amount borrowed, with no hidden fees, and can receive approvals faster than through traditional means.
- RippleNet customers simply take advantage of one simple XRP-based arrangement everywhere that ODL is available, regardless of sending destination or fiat currency, and costs a lot less than most other available credit options.