WO2018025176A1

WO2018025176A1 - Loan management system and method

Info

Publication number: WO2018025176A1
Application number: PCT/IB2017/054695
Authority: WO
Inventors: Beverley Elizabeth COURTNEY; James Knowlton COURTNEY
Original assignee: Courtney Beverley Elizabeth
Priority date: 2016-08-01
Filing date: 2017-08-01
Publication date: 2018-02-08

Abstract

System and method for managing loans, with the system providing a remote network accessible processor with an associated loan controller and an associated database; a lender's mobile device operable by a lender; and a borrower's mobile device operable by a borrower; and with the lender's mobile device and the borrower's mobile device each being configured to communicate with the remote processor using a communication service accessible to the respective mobile device and the remote processor. The system is configured for the loan controller to manage loans by receiving loan related data and managing the loan process with communication to the lender's and the borrower's mobile devices.

Description

LOAN MANAGEMENT SYSTEM AND METHOD

FIELD OF THE INVENTION This invention relates to a system and method for managing loans and utilising information from informal loans.

BACKGROUND TO THE INVENTION Many people around the world, and especially in developing countries, live close to the financial edge. These people have little or no savings and get by from "pay-day to pay-day" or "job to job".

People that find themselves in such circumstances regularly experience cash flow deficits, ranging from minor to major. Also, people in such circumstances tend to transact their lives in cash-based economies where, even for the few who have bank accounts and have bank payment cards, there is always the risk of running short of cash.

Minor cash flow deficits, such as for example cash needed for a taxi to work, to buy airtime, or pay monthly rent, can be recovered from at such person's next income event, or when such a person is able to conveniently access their cash store. Their cash stores include:

• Under the mattress for those without bank accounts; and

• ATM machine or cash-back with a debit card at a store till (for those with bank accounts); Major cash flow shocks, such as expenses for funerals, illnesses and so forth, can be very difficult to survive and may take months or even years to recover from.

Sources of 3rd party payment and financial (credit) support may be available to bridge these cash flow deficits:

· Debit cards for those with bank accounts;

• Mobile payment services;

• Airtime credit advance;

• Informal savings clubs - "stokvels" or savings circles;

• Informal, unlicensed money-lenders (loan sharks); and • "Formal" licensed lenders (institutional money lenders and banks);

However, the above 3rd party options have inherent limitations and disadvantages:

• Vendors/merchants prefer cash for tax reasons so debit cards are not widely accepted; · Mobile payment services are not ubiquitous or interoperable and also avoided for tax reasons;

• Credit may not be immediately accessible, may be costly to access, may have high cost of money, may not deal in very small or very large loans, and may be inflexible or have a high default risk; and

· Formal lenders may require the borrower to have a steady, formal job (payslips) or have a formal credit rating.

As shown in Figure 1 , popular culture has evolved a solution in the form of Peer-to-Peer Lending ("PTPL") to bridge these frequent cash flow deficits.

PTPL overcomes many of the limitations of 3rd party payment and finance and is usually a person's first choice due to its various advantages in that PTPL:

• is readily accessible as people interact with their peer group throughout the day in different life contexts. This lowers the real but often overlooked costs of telecommunications or transport surrounding financial exchanges;

• is, from a social point of view, easy to call upon as "everyone could find themselves in a similar situation tomorrow" and expectation of reciprocity is a strong motive to participate;

• is trusted, albeit with caution; particularly where there is a history of reciprocal lending or between employer and employee where pay deduction is an option;

• is flexible;

• is easy to arrange through a conversation instead of a loan application;

• is usually associated with zero interest; and,

• holds less risk associated with temporary or permanent default relative to 3rd party lending (i.e. the social risk of default is arguably less than having one's assets attached, being blacklisted, being cut off or being subjected to bodily harm by 3rd parties).

PTPL is the most common personal financial strategy used to cope with the occasional cash shortfall or financial deficits. However, PTPL has several disadvantages for the Lender:

· Transactions are mostly undocumented and are subject to memory lapses or "assumed" repayment through other favours, for example: o "I'm sure I only borrowed R20, not R50";

o "Remember, I fetched your child from school so I assumed we were even"

• PTPL is subject to assumptions about terms and, therefore, disputes regarding terms of loan and interest charges, for example:

o "I didn't know you wanted the money today, I thought I had until next pay-day"

• Most people are non-confrontational so non-payment leads to uncomfortable discussions/disputes, for example:

o "Hi, how's it going? Remember the money you borrowed from me three months ago?"

· People can forget about loans or get confused as they often lend as well as borrow and have several open positions both ways at any given time;

• Apart from an occasional written IOU, there is no mutually agreed record of individual loans or a person's net position; and,

• PTPL activity and repayment performance (good or bad) is not recorded and therefore cannot contribute to a credit rating. This is a wasted information asset which could be used to develop a credit rating for an individual. Absent a credit rating, access to 3rd party credit is constrained and/or more costly.

These limitations inhibit the value and applicability of PTPL, and keep people that have to use it in a worse-off position than they could potentially be.

OBJECTIVE OF THE INVENTION

It is an objective of the invention to provide a system and method which at least partly overcomes the abovementioned problem.

SUMMARY OF THE INVENTION

In accordance with this invention there is provided a system for managing loans, the system comprising:

a remote network accessible processor with an associated loan controller and an associated database;

a lender's mobile device operable by a lender; and

a borrower's mobile device operable by a borrower; the lender's mobile device and the borrower's mobile device each being configured to communicate with the remote processor using a communication service accessible to the respective mobile device and the remote processor, and the system being configured for:

the loan controller to receive at least from the borrower's mobile device a message reporting a loan that has been made by the lender to the borrower;

the loan controller to determine from the message details relating to the loan, the details including a loan amount and terms of the loan, unique identifiers of the lender and the borrower, and a communication number for each of the borrower's mobile device and the lender's mobile device;

the loan controller to register the loan on the database against the borrower in favour of the lender with the database record indicating the loan details;

the loan controller to transmit to each of the borrower's mobile device and the lender's mobile device a message reporting registration of the loan;

the loan controller to receive from at least the lender's mobile device a message reporting that a payment of at least part of the loan has been made to the lender; the loan controller to update the database to record the payment in respect of the loan against the database record; and

the loan controller to transmit to each of the borrower's mobile device and the lender's mobile device a message reporting the updated balance of the loan.

There is also provided for the loan controller to comprise a software application that is operated on the processor.

There is further provided for the system to be configured for the loan controller to also receive a message from the lender's mobile device confirming the loan has been made by the lender to the borrower.

There is also provided for the system to be configured for the loan controller to receive a message from the borrower's mobile device confirming the at least part repayment in respect of the loan.

There is still further provided for the system to be configured for the registering of the loan on the database to include associating an account of the lender or the borrower, as the case may be, with the communication number of the borrower's mobile device and the lender's mobile device, respectively, and further preferably for the personal identity number of the lender or borrower, as the case may be, to also be associated with its account. There is further provided for the terms of the loan to include the date by which full or partial repayment of the loan is required, a loan duration, charges for the loan and default provisions, and further preferably for the charges for the loan to comprise interest, administration or courtesy fees, and the like.

There is also provided for the unique identifiers of the lender and the borrower and the communication number for each of the borrower's mobile device and the lender's mobile device to comprise one or more of the group comprising mobile phone numbers (MSISDN), MAC addresses, and IP addresses.

There is also provided for the system to be configured for:

the loan controller to calculate the agreed fees due on the loan, if any, over and above the principle loan amount; and

the loan controller to transmit to either the borrower's mobile device or the lender's mobile device updated information in respect of such agreed fees upon receipt of a query message from either the borrower's mobile device or the lender's mobile device in respect of the amount due at any time after the loan is registered.

There is also provided for the system to be configured for:

the loan controller to determine when a payment falls due in respect of the loan; the loan controller to transmit to each of the borrower's mobile device and the lender's mobile devices a reminder message containing details about the amount presently due and the due date;

the loan controller to preferably transmit the reminder message in advance of the due date of the payment, and

the loan controller to further preferably transmit late notice reminders including the amount then due if the loan remains unsettled after the due date. There is further provided for the system to include a payment system, and for the system to be configured for:

the lender to initiate a payment instruction from the lender's mobile device in favour of the borrower, as payment of the loan amount from the lender to the borrower; the payment system to receive the payment instruction and transmitting the loan amount from an account associated with the lender to an account associated with the borrower; the borrower to initiate a payment instruction from the borrower's mobile device to the lender, as at least part repayment of the loan amount from the borrower to the lender;

the payment system to receive the payment instruction and to transmit the repayment amount from an account associated with the borrower to an account associated with the lender; and

replacing the confirmation of receipt message generated by the receiving party in the case where no payment system is utilized with the recorded movement of money between the borrower and lender via the payment system.

According to a further feature of the invention there is provided for the system to be configured for the feature of the loan controller to receive from the lender's mobile device or the borrower's mobile device a message reporting a loan made by the lender to the borrower, to comprise the system being configured for:

the borrower to transmit from the borrower's mobile device to the loan controller a message requesting a loan, specifying at least a loan amount;

the loan controller to receive the loan request message from the borrower's mobile device and to transmit to a lender a message requesting the loan on behalf of the borrower, the message indicating proposed loan details, preferably including the loan amount, a loan duration and an interest rate;

the lender to transmit from the lender's mobile device to the loan controller a message indicating acceptance or rejection of the proposed loan, or proposed alternative loan details;

in the event that the lender rejected the proposed loan then for the loan controller to transmit to each of the borrower's mobile device and the lender's mobile device a message reporting rejection of the proposed loan; and

in the event that that the lender proposes alternative loan details then for:

the loan controller to transmit to the borrower's mobile device a message reporting the proposed alternative loan; and

the borrower to transmit through the borrower's mobile device to the loan controller a message confirming the acceptance or rejection of the proposed alternative loan; and

if the borrower rejects the proposed alternative loan then the loan controller to transmit to each of the borrower's and the lender's mobile device a message reporting rejection of the proposed loan. There is further provided for the system to be configured for payment instruction from the lender's mobile device to the payment system to be transmitted directly from the lender's mobile device or via the loan controller, and for the repayment instruction from borrower's mobile device to the payment system to be transmitted directly from the borrower's mobile device or via the loan controller.

There is further provided for the unique identifiers of the lender and the borrower to comprise national identification numbers, alternatively their mobile device communication numbers. There is still further provided for the system to be configured to be implemented on the lender's mobile device and the borrower's mobile by means of a software application that is operated on such mobile device or on the Subscriber Identity Module (SIM) of the mobile device and the software application communicating with the loan controller using a communication service accessible by the mobile device.

There is further provided for the communication service to comprise any one or more of Unstructured Supplementary Service Data (USSD), Short Message Service (SMS), any of the mobile device's supported mobile data connections, including GPRS, EDGE, 3G, 4G, 5G, Wi- Fi, and the like.

According to a further aspect of the invention there is provided for the loan controller to determine a form of credit rating in respect of users of the system, preferably as identified by their unique identifiers, based on:

the borrower's borrowing patterns including:

the number and value of loans entered into by borrowers;

borrower's compliance with repayment conditions of loans they have entered into;

the lending patterns of lenders including:

the number and value of loans made by lenders;

the repayment track record for the lender's loans;

the number of communication numbers the user has utilized to interact with the system; the number of social connections evidenced by registered loans and or loan requests recorded by the system;

the length of time the user has been registered and/or active on the system; and user generated ratings of loan counterparties; and for the loan controller to provide means for the lender, and preferably also for third parties, to ascertain and/or confirm the credit rating of a user of the system.

There is further provided for the user generated ratings of loan counterparties to include borrowers rating their lenders and lenders rating their borrowers.

According to a further aspect of the invention there is provided a method of managing loans by means of a system comprising:

a lender's mobile device operable by a lender; and

a borrower's mobile device operable by a borrower;

the lender's mobile device and the borrower's mobile device each being configured to communicate with the remote processor using a communication service accessible to the respective mobile device and the remote processor, and the method including the steps:

the loan controller receiving at least from the borrower's mobile device a message reporting a loan that has been made by the lender to the borrower;

the loan controller determining from the message details relating to the loan, the details including a loan amount and terms of the loan, unique identifiers of the lender and the borrower, and a communication number for each of the borrower's mobile device and the lender's mobile device;

the loan controller registering the loan on the database against the borrower in favour of the lender with the database record indicating the loan details;

the loan controller transmitting to each of the borrower's mobile device and the lender's mobile device a message reporting registration of the loan;

the loan controller receiving from at least the lender's mobile device a message reporting that a payment of at least part of the loan has been made to the lender; the loan controller updating the database to record the payment in respect of the loan against the database record; and

the loan controller transmitting to each of the borrower's mobile device and the lender's mobile device a message reporting the updated balance of the loan.

There is further provided for the method to include the loan controller also receiving a message from the lender's mobile device confirming the loan has been made by the lender to the borrower, and for the loan controller receiving a message from the borrower's mobile device confirming the at least part repayment in respect of the loan. There is still further provided for registering of the loan on the database to include associating an account of the lender or the borrower, as the case may be, with the communication number of the borrower's mobile device and the lender's mobile device, respectively, and further preferably associating the personal identity number of the lender or borrower, as the case may be, with its account.

There is further provided for the method to include the step of inclusion in the terms of the loan the date by which full or partial repayment of the loan is required, a loan duration, charges for the loan and default provisions, and further preferably for the charges for the loan to comprise interest, administration or courtesy fees, and the like.

There is also provided for the method to include:

the loan controller calculating the agreed fees due on the loan, if any, over and above the principle loan amount; and

the loan controller transmitting to either the borrower's mobile device or the lender's mobile device updated information in respect of such agreed fees upon receipt of a query message from either the borrower's mobile device or the lender's mobile device in respect of the amount due at any time after the loan is registered.

There is also provided for the method to include:

the loan controller determining when a payment falls due in respect of the loan; the loan controller transmitting to each of the borrower's mobile device and the lender's mobile devices a reminder message containing details about the amount presently due and the due date;

the loan controller preferably transmitting the reminder message in advance of the due date of the payment, and

the loan controller further preferably transmitting late notice reminders including the amount then due if the loan remains unsettled after the due date. There is further provided for the method to include a management of a payment system, including the steps of:

the lender initiating a payment instruction from the lender's mobile device in favour of the borrower, as payment of the loan amount from the lender to the borrower; the payment system receiving the payment instruction and transmitting the loan amount from an account associated with the lender to an account associated with the borrower;

the borrower initiating a payment instruction from the borrower's mobile device to the lender, as at least part repayment of the loan amount from the borrower to the lender;

the payment system receiving the payment instruction and transmitting the repayment amount from an account associated with the borrower to an account associated with the lender; and

According to a further feature of the invention there is provided for the step of the loan controller receiving from the lender's mobile device or the borrower's mobile device a message reporting a loan made by the lender to the borrower, to include:

the borrower transmitting from the borrower's mobile device to the loan controller a message requesting a loan, specifying at least a loan amount;

the loan controller receiving the loan request message from the borrower's mobile device and transmitting to a lender a message requesting the loan on behalf of the borrower, the message indicating proposed loan details, preferably including the loan amount, a loan duration and an interest rate;

the lender transmitting from the lender's mobile device to the loan controller a message indicating acceptance or rejection of the proposed loan, or proposed alternative loan details;

in the event that the lender rejected the proposed loan then the loan controller transmitting to each of the borrower's mobile device and the lender's mobile device a message reporting rejection of the proposed loan; and

in the event that the lender proposing alternative loan details then:

the loan controller transmitting to the borrower's mobile device a message reporting the proposed alternative loan; and the borrower transmitting through the borrower's mobile device to the loan controller a message confirming the acceptance or rejection of the proposed alternative loan; and

if the borrower rejects the proposed alternative loan then the loan controller transmitting to each of the borrower's and the lender's mobile device a message reporting rejection of the proposed loan.

There is further provided for the method to include for direct transmission of payment instruction from the lender's mobile device to the payment system from the lender's mobile device or via the loan controller, and for direct transmission of the repayment instruction from borrower's mobile device to the payment system from the borrower's mobile device or via the loan controller.

There is further provided for the unique identifiers of the lender and the borrower to comprise national identification numbers, alternatively their mobile device communication numbers.

There is still further provided for the method to include implementation on the lender's mobile device and the borrower's mobile by means of a software application that is operated on such mobile device or on the Subscriber Identity Module (SIM) of the mobile device and the software application communicating with the loan controller using a communication service accessible by the mobile device.

According to a further aspect of the invention there is provided for the method to include the loan controller determining a form of credit rating in respect of users of the system, preferably as identified by their unique identifiers, based on:

the borrower's borrowing patterns including:

the number and value of loans entered into by borrowers;

the lending patterns of lenders including:

the number and value of loans made by lenders; the repayment track record for the lender's loans;

the length of time the user has been registered and/or active on the system; and user generated ratings of loan counterparties;

and for the loan controller providing means for the lender, and preferably also for third parties, to ascertain and/or confirm the credit rating of a user of the system. There is further provided for the user generated ratings of loan counterparties to include borrowers rating their lenders and lenders rating their borrowers.

These and other features of the invention are described in more detail below. BRIEF DESCRIPTION OF THE DRAWINGS

Embodiments of the invention are described by way of example with reference to:

Figure 1 which provides a graphic representation of prior art lending by showing how culture has evolved a solution in the form of Peer-to-Peer Lending (PTPL) to bridge frequent cash flow deficits; and

Figure 2 provides a graphic representation of an implementation of a loan management system according to the invention. DETAILED DESCRIPTION OF THE INVENTION

Preferred embodiments of the invention are described by way of example only. Two embodiments are described, with different points of origin of a loan. A first embodiment relates to a situation where a loan originates from a borrower, and a second relates to a situation where a loan originates from a lender.

In both instances the lender and borrower uses a mobile device for partaking in the method and using the system. The system is referred to as the "PayMeBack" system. In its simplest form, Version 1 , the system is used to record a loan that has been made person- to-person and to manage the process of repaying the loan. Version 1 is thus primarily a "recordal service" and requires users to exchange (cash) money directly and outside the system and to use the system to generate receipts when cash is transferred.

In a more sophisticated form, Version 2, the system is used by the borrower to request the loan from a lender or lenders, or for a lender to offer a loan to a borrower or borrowers, and to manage payment and repayment of the loan through associated payment services. The system may also be used by a lender who receives a request for a loan to propose alternative loan details, such as a different amount, term or interest rate. Version 2 uses e-money in the form of a PayMeBack Wallet or links to 3rd party payment systems such as mobile money wallets and bank accounts or value exchange systems such a non-monetary or peer-to-peer electronic mediums of value exchange (e.g. airtime accounts, barter exchanges, bitcoin or future peer-to-peer value storage and/or exchange mechanisms). PayMeBack users decide if they wish to use a PayMeBack wallet or link their PayMeBack account to other (3rd party) payment or value exchange systems, to which they may already be subscribed to, to make and repay loans. When two users are on Version 2, they can avoid the physical exchange of cash and receipting entirely.

For a user to get a PayMeBack wallet and/or access some of the other features of Version 2, they will have to pass normal identification approval required to open a funding account, as would be required by law in the relevant regulatory jurisdiction.

PayMeBack Wallet Funding may be done by means of:

• retail cash-in/out;

· transfer from/to a user's own mobile money or bank account; or

• Inward/outward transfer from/to another user's wallet/account.

Version 2 thus allows users to source loans from unknown 3rd parties:

• Social PTPL loans - Send Loan Request along with desired terms and PayMeBack Rating to anonymous PayMeBack users. Loans can be made and settled without personal contact;

• Loan Auction - Allow all potential lenders to bid on a borrower's Loan Request;

• This drives down borrowing costs;

• This expands borrowing opportunity outside known circle; • This also allows a lender to "Request Formal Loans" - A Loan Request may be sent along with a lender's desired terms, his FICA (identity) information and PayMeBack Rating to "formal" institutions such as banks for consideration and approval. The system according to the invention is a mobile device implemented system for managing loans, as exemplified in Figure 2, and it comprises:

a remote network (e.g. the Internet) accessible processor with an associated loan controller;

a lender's mobile device; and

a borrower's mobile device.

The lender's mobile device and the borrower's mobile device are each configured to communicate with the remote processor using a communication service accessible to the respective mobile device. The system is operated jointly by the lender, borrower and the loan controller operating in association with the remote network accessible processor, with the loan controller typically comprising software that is operated on a processor in the form of a communications network connected server. The network in this embodiment comprises the Internet, but may equally also be a mobile device specific network or a combination of different networks that interact to allow the lender's mobile device and the borrower's mobile device to communicate with each other.

The remote processor, the lender's mobile device and the borrower's mobile device are programmed to perform a method including the steps of:

the loan controller determining from the message details relating to the loan, including a loan amount, a loan duration, unique identifiers of the lender and the borrower, and a communication number for each of the borrower's and the lender's mobile devices;

registering the loan on a database associated with the remote processor against the borrower in favour of the lender with the entry indicating the loan details; the loan controller transmitting to each of the borrower's and the lender's mobile devices a message reporting registration of the loan;

the loan controller receiving from at least the lender's mobile device a message reporting that a payment of at least part of the loan has been made to the lender; the loan controller updating the database to record the payment in respect of the loan; and

the loan controller transmitting to each of the borrower's and the lender's mobile devices a message reporting the updated balance of the loan.

The various steps that form part of this are indicated in Figure 2, in relation to the lender's mobile device, the borrower's mobile device, the remote processor with the loan controller and the PTPL loan register database. LOAN ORIGINATES FROM BORROWER

In the instance where the loan originates from the borrower, the borrower may request from the lender, using the system, a basic Quick Loan or Custom Loan with special terms. A Quick Loan will have standard terms whilst a Custom Loan has, as indicated above, special terms. The lender may then respond by means of a Quick Accept, a Decline or to Propose Alternative Terms.

LOAN ORIGINATES FROM LENDER In the instance where the loan originates from the lender, the lender may offer a basic Quick Loan or a Custom Loan with special terms. The borrower may then respond by means of a Quick Accept, a Decline or to Propose Alternative Terms.

The system includes also the following further features:

LOAN RECEIPTING

• Lender: Indicate cash paid and requests receipt;

• Borrower: Acknowledges cash receipt;

· Note - Manual receipting is eliminated in Ver. 2 which will handle e-money transfer

SINGLE STEP LOAN INITIATION OR SETTLEMENT VIA "QUICK RECEIPTS"

• Quick Receipt Borrower - the existence a loan, its terms and confirmation of receipt of the loan are recorded via a single message generated by the Borrower • Quick Receipt Lender - the settlement of a registered loan is recorded via a single message repayment receipt generated by the Lender

INTEREST ("COURTESY FEE") CHARGES

• The system automatically calculates standard and default interest and adds this to outstanding loan balance.

REMINDER

• The system sends automatic reminders to both parties when a loan falls due and, if not settled, when it becomes overdue.

LOAN SETTLEMENT

This can occur in one of two ways:

• The Borrower settles with Lender and send receipt request; or

• The Lender acknowledges closure of loan with a settlement receipt. INBOX

• A user can view loan requests sent to him;

• A user can view responses to his loan requests. "MY CURRENT POSITIONS AND HISTORY"

• This displays a statement of a user's current lending, borrowing and net position;

• It also displays a statement of a user's lending and borrowing history. PAYMEBACK RATING

The system will generate a numerical PayMeBack Rating (analogous to a credit score) for users (e.g. 0 to 100 with 0 being very poor and 100 being excellent). Users automatically gain or lose formula/algorithm driven PayMeBack Rating points based on their service tenure and PayMeBack behaviour, including:

• Earn points for lending; • Earn points for borrowing;

• Earn points for repaying per agreed terms;

• Earn points for tenure of use (this encourages tenure and loan compliance);

• Lose points for repayment failures;

· Earn points for inviting additional users; and

• Earn points for richness of social lending network.

A user can check his PayMeBack Rating at any time, and can share his PayMeBack Rating with others (e.g. when requesting a 3rd party loan). This allows a user to build personal status by having a high PayMeBack Rating.

As will be appreciated the calculation of the PayMeBack Rating is such that it recognises positive and negative aspects relating to loan repayments. A higher rating indicates a higher reliability.

This provides a valuable tool for user of the system to build up a credit rating not otherwise available to him. This also allows formal financial institutions to have a greater degree of comfort when providing a first time customer with financial services, especially credit. Often such first time customers have had a long track record of dealing reliably with PTPL credit, but it is unrecorded - and therefore conventionally irrelevant as far financial institutions are concerned - because it has been person to person in the informal sector. The PayMeBack Rating allows a user of the system to build up a reliable and verifiable credit history which will be credible for a financial institution and makes it easier for such user to become a customer of a formal banking institution.

This vast majority of PTPL lending interactions which currently go unrecorded by any independent, third party is a wasted information asset which could be used to develop a credit rating for an individual. A PTPL credit rating, in the form of the PayMeBack Rating, could be the first credit rating for the mass market in the developing world and provide qualifying individuals with enhanced and earlier access to credit at lower borrowing costs.

BEYOND LOANS

Organisations can use the system to more efficiently manage any other form of payment obligation to them from individuals. These include: • Commercial obligations (payment of invoices);

• Once-off or Recurring Payments;

• "Stokvel" contributions;

• Funeral insurance payments;

· Church tithes (can have "GiveBack" feature for churches to use);

• Reminder function replaces collection calls and dunning notices;

• Batch Loading Interface (Web or App); and

• Downloadable payment reports to ease reconciliation. Use of the invention thus properly record PTPL transactions (offer, acceptance and, at a minimum, loan and repayment receipts) by a trusted, third party system, and it tracks PTPL activity and performance by an independent, third party.

It will be appreciated that the embodiments described are given by way of example only and are not intended to limit the scope of the invention. Modifications to the embodiments are possible without departing from the essence of the invention.

Claims

A loan management system comprising:

a lender's mobile device operable by a lender; and

a borrower's mobile device operable by a borrower;

the lender's mobile device and the borrower's mobile device each being configured to communicate with the remote processor using a communication service accessible to the respective mobile device and the remote processor, and the system being configured for:

the loan controller to receive at least from the borrower's mobile device a message reporting a loan that has been made by the lender to the borrower; the loan controller to determine from the message details relating to the loan, the details including a loan amount and terms of the loan, unique identifiers of the lender and the borrower, and a communication number for each of the borrower's mobile device and the lender's mobile device;

the loan controller to receive from the lender's mobile device a message reporting that a payment of at least part of the loan has been made to the lender; the loan controller to update the database to record the payment in respect of the loan against the database record; and

A system as claimed in claim 1 in which the loan controller comprises a software application that is operated on the processor, and the system is configured for the loan controller to also receive a message from the lender's mobile device confirming the loan that has been made by the lender to the borrower. A system as claimed in claim 1 or 2 configured for the loan controller to also receive a message from the borrower's mobile device confirming the at least part repayment in respect of the loan.

A system as claimed in claim 3 configured for the registering of the loan on the database to include associating an account of the lender or the borrower, as the case may be, with the communication number of the borrower's mobile device and the lender's mobile device, respectively, and further preferably for the personal identity number of the lender or borrower, as the case may be, to also be associated with its account.

A system as claimed in any one of claims 1 to 4 in which the terms of the loan, if any, includes the date by which full or partial repayment of the loan is required, a loan duration, charges for the loan and default provisions, and further preferably for the charges for the loan to comprise interest, administration or courtesy fees, and the like.

A system as claimed in any one of claims 1 to 5 in which the unique identifiers of the lender and the borrower and the communication number for each of the borrower's mobile device and the lender's mobile device comprise one or more of the group comprising mobile phone numbers (MSISDN), MAC addresses, and IP addresses.

A system as claimed in any one of claims 1 to 6 configured for:

A system as claimed in any one of claims 1 to 7 configured for:

the loan controller to preferably transmit the reminder message in advance of the due date of the payment, and the loan controller to further preferably transmit late notice reminders including the amount then due if the loan remains unsettled after the due date.

9. A system as claimed in any one of claims 1 to 8 which includes a payment system, and with the system configured for:

the lender to initiate a payment instruction from the lender's mobile device in favour of the borrower, as payment of the loan amount from the lender to the borrower; the payment system to receive the payment instruction and to transmit the loan amount from an account associated with the lender to an account associated with the borrower;

the borrower to initiate a payment instruction from the borrower's mobile device to the lender, as at least part repayment of the loan amount from the borrower to the lender;

10. A system as claimed in claim 1 configured for the feature of the loan controller to receive from the lender's mobile device or the borrower's mobile device a message reporting a loan made by the lender to the borrower, to comprise the system being configured for :

in the event that lender rejected the proposed loan then for the loan controller to transmit to each of the borrower's mobile device and the lender's mobile device a message reporting rejection of the proposed loan; and in the event that that the lender proposes alternative loan details then for: the loan controller to transmit to the borrower's mobile device a message reporting the proposed alternative loan; and

if the borrower rejects the proposed alternative loan then the loan controller to transmit to each of the borrower's and the lender's mobile device a message reporting rejection of the proposed loan.

1 1 . A system as claimed in claim 10 configured for the payment instruction from lender's mobile device to the payment system to be transmitted directly from the lender's mobile device or via the loan controller, and for the repayment instruction from borrower's mobile device to the payment system to be transmitted directly from the borrower's mobile device or via the loan controller.

12. A system as claimed in claim 10 in which the unique identifiers of the lender and the borrower comprise national identification numbers, alternatively their mobile device communication numbers.

13. A system as claimed in claim 10 which is configured to be implemented on the lender's mobile device and the borrower's mobile by means of a software application that is operated on such mobile device or on the Subscriber Identity Module (SIM) of the mobile device and the software application communicating with the loan controller using a communication service accessible by the mobile device.

14. A system as claimed in claim 10 in which the communication service comprises any one or more of Unstructured Supplementary Service Data (USSD), Short Message Service (SMS), any of the mobile device's supported mobile data connections, including GPRS, EDGE, 3G, 4G, 5G, Wi-Fi, and the like.

15. A system as claimed in any one of claims 1 to 14 in which the loan controller determines a form of credit rating in respect of users of the system, preferably as identified by their unique identifiers, based on:

the borrower's borrowing patterns including:

the number and value of loans entered into by borrowers; borrower's compliance with repayment conditions of loans they have entered into;

the lending patterns of lenders including:

the number and value of loans made by lenders;

the repayment track record for the lender's loans;

and for the loan controller to provide means for the lender, and preferably also for third parties, to confirm the credit rating of a user of the system.

16. A system as claimed in claim 15 in which the user generated ratings of loan counterparties include borrowers rating their lenders and lenders rating their borrowers.

17. A method of managing loans by means of a system comprising:

a lender's mobile device operable by a lender; and

a borrower's mobile device operable by a borrower;

the loan controller receiving at least from the borrower's mobile device a message reporting a loan that has been made by the lender to the borrower; the loan controller determining from the message details relating to the loan, the details including a loan amount and terms of the loan, unique identifiers of the lender and the borrower, and a communication number for each of the borrower's mobile device and the lender's mobile device; the loan controller registering the loan on the database against the borrower in favour of the lender with the database record indicating the loan details;

the loan controller transmitting to each of the borrower's mobile device and the lender's mobile device a message reporting registration of the loan; the loan controller receiving from at least the lender's mobile device a message reporting that a payment of at least part of the loan has been made to the lender;

the loan controller updating the database to record the payment in respect of the loan against the database record; and

18. A method as claimed in claim 17 which includes the loan controller also receiving a message from the lender's mobile device confirming the loan has been made by the lender to the borrower,

19. A method as claimed in claim 17 or 18 which includes the loan controller receiving a message from the borrower's mobile device confirming the at least part repayment in respect of the loan.

20. A method as claimed in claim 19 in which registering of the loan on the database include associating an account of the lender or the borrower, as the case may be, with the communication number of the borrower's mobile device and the lender's mobile device, respectively, and further preferably associating the personal identity number of the lender or borrower, as the case may be, with its account.

21 . A method as claimed in any one of claims 17 to 20 which include the step of inclusion in the terms of the loan the date by which full or partial repayment of the loan is required, a loan duration, charges for the loan and default provisions, and further preferably for the charges for the loan to comprise interest, administration or courtesy fees, and the like.

22. A method as claimed in any one of claims 17 to 21 in which the unique identifiers of the lender and the borrower and the communication number for each of the borrower's mobile device and the lender's mobile device comprise one or more of the group comprising mobile phone numbers (MSISDN), MAC addresses, and IP addresses.

23. A method as claimed in any one of claims 17 to 22 which include:

the loan controller calculating the agreed fees due on the loan, if any, over and above the principle loan amount; and the loan controller transmitting to either the borrower's mobile device or the lender's mobile device updated information in respect of such agreed fees upon receipt of a query message from either the borrower's mobile device or the lender's mobile device in respect of the amount due at any time after the loan is registered.

24. A method as claimed in any one of claims 17 to 23 which include:

the loan controller further preferably transmitting late notice reminders including the amount then due if the loan remains unsettled after the due date.

25. A method as claimed in any one of claims 17 to 24 including the steps of:

26. A method as claimed in claim 17 in which the step of the loan controller receiving from the lender's mobile device or the borrower's mobile device a message reporting a loan made by the lender to the borrower, includes:

the borrower transmitting from the borrower's mobile device to the loan controller a message requesting a loan, specifying at least a loan amount; the loan controller receiving the loan request message from the borrower's mobile device and transmitting to a lender a message requesting the loan on behalf of the borrower, the message indicating proposed loan details, preferably including the loan amount, a loan duration and an interest rate;

in the event that the lender proposing alternative loan details then :

the loan controller transmitting to the borrower's mobile device a message reporting the proposed alternative loan; and

the borrower transmitting through the borrower's mobile device to the loan controller a message confirming the acceptance or rejection of the proposed alternative loan; and

27. A method as claimed in claim 26 which includes direct transmission of payment instruction from the lender's mobile device to the payment system from the lender's mobile device or via the loan controller, and direct transmission of the repayment instruction from borrower's mobile device to the payment system from the borrower's mobile device or via the loan controller.

28. A method as claimed in claim 26 in which the unique identifiers of the lender and the borrower comprise national identification numbers, alternatively their mobile device communication numbers.

29. A method as claimed in claim 26 in which the method include implementation on the lender's mobile device and the borrower's mobile by means of a software application that is operated on such mobile device or on the Subscriber Identity Module (SIM) of the mobile device and the software application communicating with the loan controller using a communication service accessible by the mobile device.

30. A method as claimed in claim 26 in which the communication service comprises any one or more of Unstructured Supplementary Service Data (USSD), Short Message Service (SMS), any of the mobile device's supported mobile data connections, including GPRS, EDGE, 3G, 4G, 5G, Wi-Fi, and the like.

31 . A method as claimed in any one of claims 17 to 30 in which the method include the loan controller determining a form of credit rating in respect of users of the system, preferably as identified by their unique identifiers, based on:

the borrower's borrowing patterns including:

the number and value of loans entered into by borrowers;

the lending patterns of lenders including:

the number and value of loans made by lenders;

the repayment track record for the lender's loans;

and the loan controller providing means for the lender, and preferably also for third parties, to ascertain and/or confirm the credit rating of a user of the system.

32. A method as claimed in claim 31 in which the user generated ratings of loan counterparties includes borrowers rating their lenders and lenders rating their borrowers.