How we managed to reduce costs and increase efficiency
AmFi replaces much of the manual labor involved in these credit funds with code and centralizes the intermediaries required to run an operation on our platform.
Much of what makes the process of structuring a credit fund so slow and expensive is the intermediaries. Because we have managed to automate the roles they would play, the process of opening a pool with us becomes fast and cheap.
For comparison, in Brazil today it is not possible to set up a credit fund with a volume of less than USD 6 million, due to the high maintenance costs. This process takes at least 6 months, if all goes well, but can take more than a year.
Advantages of AmFi Pools:
Pools require much less staff to operate. For example: it is not necessary to hire an analyst to evaluate which assets make sense or not to buy, this is very well defined when creating a pool and this analysis is done automatically through smart contracts.
The disbursement of transactions is much faster because our technology has automated the bank orchestration required to make the transactions. From the moment a transaction is accepted, the money is deposited into the borrower's account within minutes, whereas traditionally this can take up to 36 hours.
And we can mention some intermediaries that we replace by our platform as examples:
Offer coordinator: responsible for receiving application and redemption orders from shareholders or distributors, controlling and maintaining the position of shares held by each shareholder, calculating and withholding taxes.
On the AmFi platform, this role of intermediary is replaced by our technology. Investors can simply register on our platform, and after having their KYC check approved, they can make their investment in a pool without any human intervention, monitor in real time how the pool is performing, and when a withdrawal is available, the tax is automatically withheld.
Custodian: responsible for receiving investment instructions, custody, physical and financial settlement of the assets that make up the portfolio of the fund, reconciliation, control of corporate events, opening accounts with clearing houses and depositaries.
On the AmFi platform, which uses the blockchain to tokenize the assets acquired by the Pools, all assets are held in custody by an SPV associated with the pool. In this way, we can guarantee that the assets are used according to the purpose of the pool, ensure any repurchases of defaulted assets, and also ensure capital segregation between the pools.
We also have a reconciliation screen that originators can use to cash the outstanding balance as repayments are made. We plan to make this process as automatic as possible in the future.
These are just a few examples, but there are many other intermediaries that our platform replaces.
An example of an operation can be found here.
Last updated
