We allow people to create and operate their own credit unions on the Blockchain, which provide savings and lending services to their members without all the usual associated costs and restrictions.
All you need to know is 7 easy principles:
1) Converting Money
As a Saver, if you want to use money in Circles you have the option to use an existing provider, such as a credit union, or you can convert your money into secure ‘cloud money’ through our partner Uphold. You can simply deposit money from your UK bank account. Your money is stored safely in the cloud, and at any moment you can transfer money back from your Uphold account to your bank account.
In your Uphold account, you can securely keep your money denominated in currencies like Pound Sterling, US Dollar or Euro.
2) Committing Money
Now your cloud money is stored in a secure account, you can commit it to Circles of your choosing. Your money will be made available as loans to the Circle members, and start earning a return. It’s up to you which Circles you want to deposit your money with and for how long. Unlike P2P Lending sites our Circles are designed to offer Savers more flexibility with instant access and well as term deposit accounts.
3) Finding Circles
You can easily search Circles to join by purpose, location, or members from your network including Facebook, Twitter or LinkedIn. Each Circle has its own Member Criteria, which may include your being the member of a certain profession, or living in a particular area.
If your profile matches the Member Criteria you can request to join the Circle. Once accepted you will be able to both Save or Lend within it through an automated process.
4) Creating Circles
You may find there isn’t already a Circle for the type of people you want to save & lend with. In this case you are free to set one up yourself.
A new Circle needs to have a unique purpose and meet our minimum member and deposits requirement.
5) Joining Circles
You can clearly see each Circles’ Purpose (e.g. Profession) and Description (e.g. “Silicon Round-about Entrepreneurs”) as well as those members you know from your contacts, including from across Gmail, LinkedIn and Facebook.
6) Borrowing From Circles
Once you are accepted by a Circle to become a member you will be given a Credit Limit. Your Credit Limit is a combination of a Circle Credit Cap and your MoneyCircles.com Trust Score.
The MoneyCircles.com Trust Score is based on an openly available scale and indicates good credit behaviour within our Circles. For example, your Credit Score will rise if you repay your loans in a consistently timely fashion and it will decrease if you default or request borrowing from one or more Circles too frequently.
You can take out a loan up to your Credit Limit. Any loan taken out of the Circle is from the aggregate savings pool and semi-anonymous. The application for a loan is made semi-anonymously and the decision is usually made automatically within 10 minutes. After approval the money is transferred into your Uphold account, from where you can transfer it into an offline bank account of your choosing.
7) Sharing Benefits And Risks
Benefits and risks are shared between all members of a Circle. When you commit money to a Circle, it goes to the shared Circle balance. Loans are taken out of the Circle balance, and repaid to the Circle. If the months Default Rate is lower than expected, the surplus interest yielded is paid out to members by way of a share of the Circle’s profits, also known as a dividend.
When loans are repaid in time, all members benefit, because the Circle will be able to pay out better dividends. If a loan defaults, all members share the risk because the defaults are compensated from the Circle balance.
No single person is directly affected if an individual borrower defaults as Circles (whether backed by credit unions or banks) must put a reserve to one side to account for missed payments. Unlike P2P, deposits will be protected by UK and EU compensation schemes.
MoneyCircles means saving and lending together.