Introduction
What is AmFi and why was it created?
The name AmFi is an acronym for Amphibious Finance, the evolutionary force of transition from one state to the next. As amphibians, inhabiting two worlds, we aim to combine the expertise of the TradFi with the efficiency blockchain provides, in a simple, secure and easy way.
AmFi provides a platform for companies to build and operate real-world credit solutions using blockchain.
Our first product is Liquidity Pools, designed to help companies set up and operate Funding Pools that use tokenized financial assets¹ as collateral.
Our goal is to work alongside the best originators to fund a variety of real-world businesses and provide investors around the world with a range of new investment products with predictable returns backed by real assets. We also aim to fill the gaps in TradFi lending by offering a more competitive alternative to traditional debt facilities, while expanding the credit market and making it more accessible.
To create these pools, AmFi is developing an on-chain credit infrastructure alongside off-chain payments and legal solutions that comply with current local regulations. In this way, the operational experience is as smooth as possible and can be easily executed when needed.
Although there is excess liquidity in global capital markets, most SMEs² in Latin America still struggle to access capital. The major pain points are:
- Only the largest businesses have direct access to capital markets, so most SMEs can only count on traditional banks for their capital needs.
- According to the World Bank, SMEs in Latin America have unmet credit needs of $1 trillion.
- These companies pay more than twice the interest rates of large companies (at least 25%/year, and going as high as + 100%/year), although their default rate of 2% is as high as that of large companies.
The main reason is that setting up credit funds is expensive, so players who want to offer loans are forced to either massify the business model or focus on deals large enough to justify the operational effort needed to properly analyze the borrower and their assets.
In addition, raising capital for this purpose is also challenging and supply is limited. While global capital markets have excess liquidity and a lack of good investment opportunities, allocating this capital in Latin America is difficult, bureaucratic and expensive.
If investment capital were not so hard to raise and funds were not so expensive to establish, many players in Latin America could offer profitable, low-cost credit to their user base.
AmFi Pools have the power to solve both of these problems.
¹ https://medium.com/amfi-finance/asset-tokenization-an-overview-cc63db4b9e0
² Small and medium enterprises
Last modified 2mo ago