Please read our updated whitepaper here:- https://www.peerfin.io/whitepaper.pdf
With your response number two it is still the same problem though isn’t it? If the student is borrowing in usd/eur but has to repay from wages in rupiah and the rupiah drops they could end up having to repay much much more than if their loan was taken and repaid in rupiah. this happens a lot in loans to developing countries.
Dude… please read our whitepaper for more info. The volatility of Rupees or Rupiah is not in our hand.
Current scenario - If a student from India applied for a loan in June 2018 for $85,000 for his masters, he/ she would have to loan INR 57,80,000 (Fifty-Seven Lakh Eight Hundred Indian Rupees) form the local bank.
Historically, the Indian Rupee reached an all-time high of 74.33 in October of 2018. $85,000 in October would be 63,18,050 (Sixty Three Lakh Eighteen Thousand Fifty Indian Rupees). That means a student who secured loan in June will have to pay the difference of 5,38,050 (Five Lakh Thirty-Eight Thousand Fifty Indian Rupees), i.e., $7328 + the interest on the disbursed amount in INR which will change according to the exchange rates.
Peerfin helps students to avoid the FX risks involved when availing loans. Our loans are in GBP, USD, and EUR in phase 1. Since the loan disbursements are processed in the university accepted currency, the student is saving at least $3000 - $10,000 of FX risk.
There are many other advantages for our student if he is borrowing via Peerfin. Check this out.
You have described the problem but not the solution. Thanks for that but the whitepaper actually doesn’t describe the solution either.
“Peerfin helps students to avoid the FX risks involved when availing loans. Our loans are in GBP, USD, and EUR in phase 1. Since the loan disbursements are processed in the university accepted currency, the student is saving at least $3000 - $10,000 of FX risk.”
Why not make the loans only in Rupiah? Problem solved.
READ THE WHITEPAPER AGAIN.
- First… Rupiah is not a currency in our country. We operate outside India. It’s USD here.
- We are giving loans to international students.
- The destination accounts are located in USA and EU
The problem is providing loans in native currency for students creates FX risk. Our target market is "students who want to go outside India, China, Vietnam etc. and study. I think you haven’t read the paper properly. Read it again and again.