Savers could be lending to colleagues at their organisation or employees from other organisations they support including, doctors, nurses, teachers and private sectors employees from reputable organisations who support the Cooperativa exchange.”
For internal savers loan funding is provided by employee members of the cooperative or company through host cash
Employees: Employees of the host company can save any cah amounts by funding loans to other employees within the company or employees of other companies that host the Cooperativa platform. Companies: Companies can earn interest on additional cash and provide salary advances to their employees ny providing loan funding through the platform.
For external savers funding is also provided by memebers who are not employees of any Cooperativa host company. These savers allocate their lending across savers from a wide range of companies
• Institutional Lenders: These may include carefuly selected pension funds, insurance companies and other lending vehicles allowed to be members of the platform
• Private Individuals: This included individuals who lend directly to company employees e.g. within sectors they may have previously worked in or particular areas where they believe their is a social benefit of lending
Once loans are matched savers are presented with an illustration of the loan repayment profile based on borrower matches.
The cooperative exchange is not backed by the UK governments bank deposit gurantee scheme so as with all private lending, savings your money for a return will always have some financial risks. However, Cooperativa expects loan losses to be the lowest in the sector if not non-existent given the platforms rsecure approach to managing paymenst collection.
• Careful selection of cooperative exchange member companies Cooperative host companies are carefully selected from companies, organisations and professions that have low levels of attrition, collegiate work cultures and backing the exchange with the inherent cooperation within cooperative groups with shared rules and values.
• Direct Salary deduction All loan repayments are deducted directly from employee salaries before any other expenses (e.g. direct debits, household bills).
• Diversification of risk by spreading savers funds across multiples loans Savers funds are allocated across a number of borrowers with a maximum exposure of 5% of savers funds funding any loan reducing exposure to any one borrower.
• Upper Lending limit of 1 month of net salary adjusted on a host by host basis Lending limits are set on a host by host basis with an upper lending limit of 1 months net salary. There are also with significant finacial disincentives for taking a loan past period of planned employment.
• Final Salary Deduction In cases where employment is ended and a loan is still outstanding any residual loan amount is be collected directly from the employee’s final salary and in cases of termination, from their compensation.
• Managed payment collection for members leaving the exchange In the event that borrowers leave the company before their full loan amount can be deducted cooperative manages collection of loans on behalf of lenders (e.g. by bank account direct debit) with the ability to earn a higher rate of return for savers lending to member outside of the cooperative through incremental interest charges at higher market rates on any residual loan amounts.
• Loan loss fund protecting savers from losses In addition Coopertiva employs an innovative risk management system that compensates savers for any losses using a shared fund.
Together with careful selection of exchange members, familiarity (common bond ) between members and direct salary deduction Cooperativa provides the secure management of savers funds.