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SA money-lender now accepts NFTs as collateral

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Lamna Financial co-founder Charles Meyerowitz.
Lamna Financial co-founder Charles Meyerowitz.

South African-based asset-backed lender Lamna Financial claims it is one of the first financial services companies in the world, and the first in Africa, to offer loan advances against non-fungible tokens (NFTs).

The registered credit provider offers short-term asset-backed loans targeted at high net worth individuals.

The company provides fixed interest rates ranging from 36% to 60% annual percentage rate and payment options from three to 24 months.

The financial services company says since its establishment in 2013, it has disbursed in excess of R1 billion to more than 7 500 customers by providing loans using customers’ assets, such as vehicles, watches, jewellery, gold and diamonds, yachts and boats, as collateral.

With the explosive growth of crypto-currency now opening a new world of investment opportunities, Lamna Financial says it has expanded its offerings to allow customers to take loans in exchange for NFTs, considered an important asset class for investors.

An NFT is a secure digital file that validates ownership and is stored on the blockchain system, where each NFT can represent a unique digital item, and thus is not interchangeable.

NFTs can represent digital files such as art, audio, videos, items in video games and other forms of assets in the physical world. While the item itself can be copied, the NFT that includes certification of ownership cannot be duplicated.

“Lamna’s move into the digital space is more than merely ‘moving with the times’,” says Lamna co-founder Charles Meyerowitz.

“With the rapid growth of crypto-currencies, we understand that our clients’ buying power has increased, and this includes investing in digital asset classes. We understand that the modern client isn’t limited to investing in traditional assets, such as physical works of art, motor vehicles or jewellery, and so to be a relevant asset-backed lender in the 21st century, we are leading the charge in the world to cater to investors who need to unlock the liquidity of their assets.”

NFTs are increasingly drawing the interest of South African companies, with developments unfolding locally, as the blockchain-based cryptographic craze booms across the globe.

According to industry insiders, while the trend is still at an early stage locally, South African firms are identifying huge potential in NFTs, which they say hold infinite benefits for organisations across sectors and for investors.

Once Lamna has verified the unique identity and ownership of an NFT (listed on a different platform), and ascertained the value of the asset, it makes an initial loan offer to the registered owner.

Meyerowitz expects rapid growth of NFTs put forward as collateral for short-term loans, with NFTs to become a substantial portion of new business, joining the list of the other most-leveraged assets, including sports cars, trucks and jewellery.

He says many customers find the asset-backed funding route attractive because of the absence of red tape, the speed of the service and limited paperwork.

Discussing the distinguishing factors of Lamna from competitors, Meyerowitz points out: “Many entrepreneurs simply need to bridge a liquidity gap and approach us for speed, convenience and transparency, while others appreciate the discretion. Lamna's high percentage of return clients emphasises the importance of trust and a lender's credibility.”

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15 Aug
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