WO2012098497A1

WO2012098497A1 - Online (network) financial provision system including creditor, debtor, intermediary, and banks modules and method of its application

Info

Publication number: WO2012098497A1
Application number: PCT/IB2012/050220
Authority: WO
Inventors: Linas ARMALYS
Original assignee: Armalys Linas
Priority date: 2011-01-19
Filing date: 2012-01-17
Publication date: 2012-07-26
Also published as: LT5876B; LT2011001A

Abstract

The aim and product of this invention is a financial provision system consisting of a creditor module (1), a debtor module (4), an intermediary-administrator module (2), and banks module (3) and ensuring a possibility for the debtor module users to borrow money from the creditor module (1) the users of which are not only legal, but also natural persons. Such a system also enables the debtor module (4) users to borrow money under better conditions compared to borrowing from banks in a conventional way. The matter (essence) of this invention is a system that encompasses the following users of the system: creditors, debtors, representatives of bank, and an intermediary, where the said intermediary holding a licence to provide investment services performs the functions of financial representation among the previously mentioned creditor module, debtor module, and banks module or among the respective users of the said modules. This financial provision system enables a market segment of natural persons who potentially can credit legal persons; it is very convenient to both debtors and creditors. In this system the banks module (3) is regarded only as an insurer of financial flows instead of an owner of them.

Description

ONLINE (NETWORK) FINANCIAL PROVISION SYSTEM INCLUDING CREDITOR, DEBTOR, INTERMEDIARY, AND BANKS MODULES AND METHOD OF ITS APPLICATION

Technical Field

This invention is related to financial systems and commercial structures linked to money flows from a creditor to a debtor; and particularly to systems where the function of a creditor is performed not only by legal, but also by natural persons.

Background Art

Flows of goods and money first appeared very long ago. However, the recent global financial crisis made people think more about financial systems and their relations to bank structures and other potential participants in money market.

On 31 January 2003 a well-known French patent No. FR2827979 was published. This patent describes an internet-based system consisting of a creditor network, a debtor network, a network server, a database, and agreements enabling performance of lending and borrowing transactions between creditors and debtors. However, the participants of this system can be legal persons only, because according to the current market regulation rules (a law) legal persons cannot directly borrow money from natural persons.

Another well-known patent is that of Koreans with No. KR20040099975 published on 2 December 2004. This patent describes an internet-based system consisting of a creditor network, a debtor network, a network server, a database, and a bank. The system collects the best proposals from the creditor network and submits them to the bank. Accordingly, the bank can submit the best proposals to the debtor network. However, in this system the network server and the analytical system belong to the bank institution, therefore it represents the interests of the bank more. On the one hand, banks thus attract potential external financial resources from legal and natural persons under the best conditions; on the other hand, they strive to sell those credits to the debtor network under the best conditions. Thus this system is more convenient to banks than to debtor network.

One more known patent is American No. US2009210340 published on 20 August 2009. This patent describes a system consisting of a creditor and debtor network and supported by internet-based interactive environment. The core of this patent is elaborated multifunctional interactive environment offering all the participants of this system the following convenient functions: registration to the network, possibility for participants to see each other and communicate, build queries, sign contracts, etc. However, the common scheme of the participants remains essentially the same: a network of debtors and creditors, which consists of legal persons.

There is a known American patent No. US2010070415 published on 18 March 2010. The patent describes a system consisting of computers, software, internet-based interactive environment, clients, service providers, and a bank. The system described in the patent allows clients / creditors (natural or legal persons) to pay money for services not directly, but via a bank by giving respective instructions to the bank via the previously-mentioned interactive environment. The said instructions can be given as slips that are safely scanned and transferred from the client to the bank via a computer network. Participants of this system can be both legal and natural persons, but the system is more of settlement type.

The application with the most similar technical level is that of Japanese with No. WO2010113283, published on 7 October 2010. This application describes a flexible creditor / debtor system encompassing creditor and debtor networks as well as interactive environment. The system includes many creditors ready (under certain conditions) to lend some amount of money to debtors. The essence of this system is that creditors' loans are granted to debtors like in an auction: the money is received by the debtor offering the best conditions to the creditor. This system, however, represents the interests of creditors more, because debtors that need money under the best conditions can receive it essentially only under the worst conditions. Another aspect of this invention is that participants at such auctions can be legal persons only.

We can see that the world knows a number of well prepared creditor / debtor interactive environments and systems with both technical and software aspects perfected, however, most of them represent more the interests of creditors and much less those of debtors. On the other hand, participants in such systems are legal persons only, the number of which in the world is much lower than that of natural persons who are potentially capable of participating in such systems. Moreover, the main role, management, and decision-making in such systems usually lie with the banks that mostly represent the interests of end creditors (as a rule, formally their own).

Technical Problem

Technical Solution

This invention is aimed at creation of such a financial provision system that

encompasses the modules of creditor, debtor, intermediary‑administrator, and banks,

where, by employing a system of network servers, these modules are interconnected and make an interactive internet-based environment,

and that would ensure:

a possibility for debtor module users (legal persons / companies) to borrow money from the creditor module the users of which are not only legal, but also natural persons;

a possibility for debtor module users to borrow with better conditions (e.g., lower interest on a loan) compared to borrowing from a bank in a conventional way.

The matter (essence) of this invention is a system that

includes the following users of the system: creditors (legal and natural persons), debtors (legal persons), banks (legal persons), and an intermediary-administrator,

where the said intermediary-administrator

holding a licence to provide investment services and

available to all the system users (participants) as an internet-based interactive environment or administrative institution

performs the functions of financial representation

among the previously mentioned creditor module, debtor module, and banks module or

among the respective users / participants of the said modules.

The key uniqueness of this invention is that in such a system:

creditor module users (not only legal, but also, and in particular, natural persons) can lend their money to debtor module users (legal persons), i.e., such a system enables a market segment of natural persons who can credit legal persons;

interests of the debtor module users are represented more than those of the banks module users;

role of the banks module users is only secondary instead of the main one, because within this system the banks module is regarded only as an insurer of financial flows instead of an owner of them.

Advantageous Effects

Description of Drawings

Fig. 1 depicts the financial provision system flowchart consisting of a creditor module (1), an intermediary-administrator module (2), a banks module (3), and a debtor module (4).

Best Mode

It has been noticed that the world knows a number of internet-based interactive systems linked to creditors and debtors, where creditors can lend their financial resources to debtors under certain conditions. However, these current systems have a few shortcomings as well. One of these shortcomings is that only legal persons participate in such systems, because according to the current market regulation rules legal persons (companies) cannot directly borrow money from non-professional clients (i.e., natural persons). Another shortcoming is that these and similar interactive systems represent the interests of creditors more than those of debtors. They have yet another problem: in most cases managers of all these interactive environments and owners of the financial flows (current and potential) are banks that charge not only for insurance of the said financial flows, but also for their 'rent' / lending.

It has also been noticed that substantial amounts of free funds are frozen in accounts of natural persons for which banks (particularly recently) pay very low interest, and for the balance of the current account they often pay nothing at all. However, banks use these financial resources of natural persons and earn money, of which only a small part is given to the owner of the deposit (a natural person).

In principle, a company has some possibilities to borrow not via a bank, but directly from natural or legal persons, however these methods are rather complicated and require substantial administrative supervision. Here are three examples of such borrowing:

· A company may borrow from creditors not via banks, but directly via a financial agent by issuing the company's bonds. However, the procedure of issuing of bonds is very complicated: structured bonds must be issued. Moreover, such bonds have an issuance deadline, maturities, they cannot be sold or bought at a time of choice. These aspects make such use of bonds inflexible. Certain flexibility of it might be ensured only by a bonds liquidity agent, but in such a case the system itself would become even more complicated and administrating it would get more expensive.

· A company may borrow from a bank, but in such a case the company pays the bank not only for the risk of insolvency, but also for financial resources that the bank must attract to enable funding of the company. The factor of market power is also important: a company with large financial flows is much more advantaged than a company that does not have that and just asks for money for interest.

· Because customer loyalty is very important to a company, as customers usually choose products or services of the company they are more loyal to, a company can try to increase customer loyalty. One of the common ways towards that is discounts. However, the effect here is contradictory to the aim: a company seeks to boost its turnover and profitability, but by giving discounts it reduces them both per one item. Positive effect often comes from the increased number of customers: customers choose to buy this item with a discount instead of another one without a discount from another producer. But when both producers start giving discounts, the effect gets neutralized and both companies stay with reduced turnover and profit. In both of these cases the immediate aim of a customer is not the success of the company, but lower price for larger quantity or better quality.

The currently commonplace creditor and debtor system consists of the following modules: legal person creditor module, legal person debtor module, and banks module. If natural persons participate in such a company crediting system, their participation is usually mediated by a bank and they are completely isolated from this process and are not aware whom their money is lent to. Frequently they not only do not participate, but do not even know that the mentioned financial resources frozen in their accounts participate in some process (for example, are used for crediting) at all.

In order to release these frozen money of natural persons and to enable their use for the sake of debtors, to be less dependent on terms and conditions of banks, to better represent the interests of debtors, and to let a natural person choose a specific organisation (s)he would like to credit and what benefit to receive in exchange, a new financial provision system has been created.

Fig. 1 presents a structure of the invented financial provision system consisting of a creditor module (1), intermediary-administrator module (2), banks module (3), and debtor module (4). The system consists of an online interactive environment to the separate previously mentioned modules of which certain groups of registered people can connect (under certain conditions).

Natural or legal persons willing to participate in the financial provision system as creditors can connect to the said creditor module (1). Therefore these persons that have connected to the creditor module (1) and form a creditor network are creditors. The major advantage of this module is that not only legal, but also natural persons (that are most welcome to this system) can connect to it. There may be a great number of such connected persons (creditors). The persons that have connected to the creditor module (1) (creditors) can see a list of legal persons (companies) seeking to borrow a certain sum of money. Having connected to such an interactive environment (for example, a website) a creditor can indicate an amount and a company it awards this amount to. Then, using a bank-link type direct payment tool and connecting the creditor as a client to own bank account, the creditor makes a transfer from its account via online banking to the account indicated by the intermediary-administrator module (2), i.e., to a fund of the raised money. Additionally, the creditor can instruct or agree for its funds transferred to the mentioned fund of money to be later kept in one of the indicated commercial banks of the country.

Legal persons (companies) willing to receive a monetary loan from natural or legal persons and submitting a corresponding request to the intermediary-administrator module (2) can connect to the debtor module (4). The persons that have thus connected to the debtor module (4) and form a debtor network are debtors.

The banks module (3) can be joined by representatives of banks. There may be one, several, or many banks participating.

According to the current market regulation rules a company cannot directly borrow money from non-professional creditors (natural persons), therefore the system of this invention includes an intermediary-administrator module (2) that a legal person (further referred to as an intermediary) holding an appropriate licence to provide investment services connects to. Several information flows conjoin in the intermediary-administrator module (2): information about debtors and their intentions to borrow a certain amount of money, and information about creditors able / intending to lend a certain debtor a certain amount of money. To enable creditors to see the debtors' requests, the intermediary must provide the creditors with this information in an appropriate format. Later the creditor instructs the intermediary to lend a certain amount of money to a selected debtor under chosen conditions and transfer this amount of money to the mentioned fund belonging to the intermediary-administrator module (2). Additionally, through the mentioned intermediary the creditor may obligate the debtor to make a decision on which bank should keep his (the creditor) money. The creditor (creditor network) money gets accumulated in the mentioned fund. Once connected to the mentioned debtor module (4) the debtors have a possibility (provided by the intermediary) to see which portion of this money is allocated exactly to them. Afterwards the users of the debtor module contact the users of the banks module (3) and discuss the conditions of the loan of money and select the most suitable bank. In order to obtain the best conditions for the loan from a bank the intermediary may open invitations to tender, because although the money to be lent is in the bank account, it does not belong to the bank directly. By means of an invitation to tender or some other (e.g., prescribed by the creditor) the debtor has a right to choose in which bank the money borrowed from the creditors and held in the fund administrated by the intermediary will be kept, which is an argument when seeking better conditions of financing. When the debtor has chosen a lending bank after connection to the debtor module (4) it notifies the creditor and the intermediary about that: appropriate contracts are signed by all the participants of this financial provision system. Then the creditor's money kept in that fund are allocated and provided to the debtor. The creditor has a possibility to get his money back to his account at any time, because this allocated and provided money is managed by an intermediary-administrator module (2) in that fund and not by representatives of the banks module (3). The only function a bank performs in such a financial provision system is that of an insurer, because it only re-lends the money entrusted by the creditors to the debtor, assuming only the risk of the debtor's insolvency and (through a central bank) issuing a guarantee for the money entrusted by the creditor. Formally the bank remains the holder of borrowings and deposits, but it is deprived of control of money flows, because the same amount of money borrowed from the bank will be transferred to the same bank, but only if all the participants of the system reach an agreement on all the conditions of the loan. The creditor therefore bears no risk at all to lose its money in case of the debtor's insolvency.

For the creditor to be interested in lending money to the debtor, the latter undertakes (this is covered in the contract) to pay, at certain intervals, the creditor certain fees, for example, an agreed percentage of the debtor's turnover. The benefit for the debtor in such a system is not only that it can receive a loan under more favourable conditions, but also that the creditor becomes a certain part owner (like a shareholder) of the debtor. The only difference from a shareholder is that in this system a creditor is entitled to a portion of the debtor's turnover (sales) and becomes loyal to the debtor, because it is interested in increase in the debtor's turnover and its commercial success. Use of other forms of such fees is also possible, provided that they increase the loyalty of creditors to debtors.

It must also be noted that:

the intermediary-administrator module (3) provides a possibility for the users in the creditor module (1) to delegate the decision on where to keep the said deposit in the banks module (3) to the debtor module (4) and thus the debtor module (4) becomes the redistributor of the financial resources.

users of the banks module (3) are deprived of the possibility to decide for users of the creditor module (1) on whom their (creditors') money should be lent to;

the debtor module (4) buys from the banks module (3) only the service of reinsurance and not (in contrast to the current practice) the provision of financial resources.

The interactive environment of the financial provision system is fully automated: all the processes take place automatically at the set times and stages, including initiation, modification, approval, and launch of various subprocesses. Moreover, certain groups of people are given possibilities to connect to the system at different levels (i.e., every user is granted certain rights and certain restrictions as well) and to different modules of it, thus seeking to ensure the versatile functionality of the system at different levels.

Mode for Invention

Industrial Applicability

Sequence List Text

Claims

1. A financial provision system consisting of the creditor module made up of the creditor network and the debtor module made up of the debtor network, c h a r a c t e r i z e d in that it additionally has an intermediary-administrator module (2) and banks module (3),

in which:

representatives of creditors, debtors, intermediary, and banks connect to the respective creditor (1), debtor (4), intermediary-administrator (2), and banks (3) modules of the said interactive environment and carry out various functions available to them;

a debtor submits a request to borrow a certain amount of money from creditors (legal or natural persons) via the intermediary;

the intermediary submits information on the debtors' requests to creditors;

a creditor instructs the intermediary to lend (reserve) a certain amount of money to a chosen debtor under the chosen conditions and to transfer this amount of money to the said fund that belongs to the intermediary;

the intermediary submits information to debtors on the funds potentially available / allocated to them;

the debtor contacts the representatives of the banks and bargains over the terms and conditions of a loan;

the debtor selects (by tender or according to some other criterion) one of the banks from the banks module (3) and notifies the intermediary and the creditor;

all the participants in this financial provision system sign appropriate contracts and the intermediary allocates and transfers the creditor's funds to the debtor;

where:

through a system of network servers all these creditor (1), debtor (4), intermediary-administrator (2), and banks (3) modules are interconnected and comprise an internet-based interactive environment accessible only to appropriate user groups having appropriate access rights;

an intermediary-administrator module (2) licensed to provide investment services ensures a possibility for the users of the debtor module (4) (debtors) to borrow money from the creditor module (1), the users of which (creditors) are not only legal, but also natural persons;

an intermediary-administrator module (2), which is accessible to all users / participants of the financial provision system as an internet-based interactive environment or an administrative institution, performs the functions of financial representation among those creditor (1), debtor (4), and banks (3) modules or among the respective users / participants of the corresponding modules;

the role of users of the banks module (3) is not primary, but only secondary, because in this system the banks module (3) functions only as an insurer of financial flows instead of being their owner and / or manager.

A financial provision system according to claim 1, c h a r a c t e r i z e d in that the creditor can specify a bank that the debtor must choose.

A financial provision system according to claim 1 or 2, c h a r a c t e r i z e d in that the number of users of creditor (1), debtor (4), intermediary-administrator (2), and banks (3) modules can be various and either limited or unlimited.

The method of use of the financial provision system comprising the said creditor (1), debtor (4), intermediary-administrator (2), and banks (3) modules, c h a r a c t e r i z e d in that this financial provision system is in accordance with any of the above mentioned claims 1-3.