Ripple Enters Lending Business to Give XRP in Credit to Small and Medium BusinessesOctober 9, 2020
Ripple knows where the money is and they are entering the lending business. Ripple Insights reported on how Ripple have launched a Line of Credit that is set to be a beta service on the RippleNet.
Now customers will be able to use On-Demand Liquidity (ODL) to source capital on demand to start off with cross-border payments at scale making use of the digital asset XRP.
Several small businesses face the trouble of limited access to working capital. This is a barrier to growth for several companies. Small and medium businesses do not have large balance sheets to scale their business quickly.
When the small businesses seek out to making credit arrangements it is not easy for them to fulfill several criteria asked by well-known creditors.
Ripple’s Line of Credit are solving this issue for their customers. They provide upfront access to financial capital for businesses from every sector by a simple credit arrangement. Credits have gotten very simplified with Ripple and therefore helps the small businesses to scale efficiently.
Those making use of ODL on RippleNet will be able to buy XRP from Ripple on credit. Borrowers are charged a one-time fee on the amount borrowed. There are no hidden fees, and users will be able to receive approvals quickly then they can with traditional borrowing models.
Thus, RippleNet customers can make the best use of the XRP-based credit arrangement everywhere the ODL is available. This is possible to all places where there is a destination partner. The cost is very less when compared to other credit options.
Sydney Ifergan, the crypto expert tweeted: “Ripple (XRP) knew that value of XRP investments cannot sleep and they are beginning to lend.”
Ripple (XRP) Line of Credit
Of note, the Line of Credit is already piloted by RippleNet customers, who have been specializing in cross-border money transfers. They have already experienced the benefits firsthand. They have helped the companies who participated in the pilot project grow their business in a way making global transfers very affordable and possible for more people.
Ripple XRP, thus opens up opportunities to make use of the capital that has been freed from pre-funded accounts which can be further invested for the development of their business to enter in to new markets and top gain access to new customers.
RippleNet are making use of technology to provide for financial solutions for the businesses which were once only provided by multinational banks. The important thing is that there is no need for cost and overhead like in legacy systems.
By leveraging distributed ledger technology (DLT) and XRP, Ripple has made the kind of lending that was not possible before.