Credit Markets - A Multidimensional Problem

Kasu views the credit markets problem as multidimensional, resulting in deep systemic issues. Existing RWA lending platforms have paved the way in levelling the playing field for everyday DeFi Lenders to access diverse yield opportunities. But, as time progressed, this has become the RWA industry norm.

At Kasu, we see the problem as much deeper than merely democratising access to credit markets. Whether it's TradFi or RWA lending, the problem remains that lending is a commoditised product. No business lending solutions exist to fix the core cash flow problem that initially creates the borrowing need.

For example, a business whose cash is tied up in debtors typically seeks an invoice finance loan to solve their cash flow problem. However, an invoice finance loan fails to solve the root cause of the problem, which is late debtor collections, thereby presenting increased credit risk to Lenders.

Whether it's credit funds, banks, or RWA lending platforms, financiers do not offer any value-add solution to solve the root cause of the cash flow problem. Consequently, they are subjected to fierce interest rate pricing competition, offering no value beyond the commodity of ‘money.' The 'commoditised' nature of the industry therefore results in minimal loyalty from borrowers and other stakeholders.

Therefore, merely moving from TradFi to DeFi (or RWA lending) to circumvent overregulation, excessive fees, and untenable terms associated with traditional lending only solves a very small part of the problem. However, the systemic issues outlined above remain in place—they still exist, only now on-chain.

Kasu solves this problem through its unique technology-driven lending solutions.