# Micro Lending Business Plan - Lendair

**Date:** March 26, 2026  
**Status:** Draft for Board Review  
**Project:** Lendair (FRE-449)

## Executive Summary

Lendair is a micro-lending platform enabling peer-to-peer small loans through an iOS app and web interface. Targeting underbanked populations, the platform facilitates trust-based lending with transparent terms and automated repayment tracking.

## Market Opportunity

### Target Market
- **Primary:** Kenya (MVP launch market)
- **Demographic:** Unbanked/underbanked populations aged 18-45
- **Size:** Kenya has ~65% of adults using mobile money, creating infrastructure readiness

### Problem Statement
- Traditional banks reject small loan requests (<$500) due to overhead
- Informal lending (friends/family) lacks structure and tracking
- High interest rates from predatory lenders (up to 300% APR)
- No credit history building for small borrowers

### Solution
- Platform-mediated micro-loans ($50-$1000 range)
- Trust score system based on repayment history
- Automated reminders and partial payment support
- Credit building through verified repayment history

## Product Overview

### Core Features
1. **Lender Side**
   - Browse loan requests with risk ratings
   - Set lending budget and risk tolerance
   - Track portfolio performance
   - Automated repayment collection

2. **Borrower Side**
   - Submit loan requests with purpose
   - Build trust score through repayment history
   - Flexible repayment schedules
   - Credit history export

3. **Platform**
   - Identity verification (KYC)
   - Dispute resolution system
   - Automated payment processing
   - Risk assessment algorithms

### Technical Stack
- **Auth:** Clerk (user management, SSO)
- **Backend:** tRPC (type-safe API layer)
- **Database:** Turso (SQLite at edge, low latency)
- **ORM:** Drizzle (type-safe schema)
- **Frontend:** SolidStart (web), SwiftUI (iOS)
- **Styling:** TailwindCSS

## Revenue Model

### Primary Revenue Streams
1. **Transaction Fees:** 2-5% per loan (split between lender/borrower)
2. **Premium Features:** $2.99/month for advanced analytics, priority support
3. **Late Payment Processing:** $1 fee (capped at 10% of loan)

### Pricing Strategy
| Loan Size | Transaction Fee | Platform Cut |
|-----------|-----------------|--------------|
| $50-200   | 5%              | 1.5%         |
| $200-500  | 4%              | 1.2%         |
| $500-1000 | 2%              | 0.8%         |

### Unit Economics (per loan)
- Average loan: $200
- Average fee: 4% = $8
- Platform revenue: 1.2% = $2.40
- Processing cost: ~$0.50
- Gross margin: ~79%

## Go-to-Market Strategy

### Phase 1: Kenya MVP (Months 1-6)
- Launch with 100 beta users (50 lenders, 50 borrowers)
- Partner with local mobile money providers (M-Pesa)
- Focus on community-based lending circles
- Target: $10K total loan volume

### Phase 2: Scale Kenya (Months 7-12)
- Expand to 1,000 active users
- Add credit bureau partnerships
- Introduce group lending features
- Target: $250K total loan volume

### Phase 3: Regional Expansion (Year 2)
- Nigeria, Ghana markets
- Local language support
- Agent network for cash-in/cash-out
- Target: $2M total loan volume

## Competitive Landscape

### Direct Competitors
- **Branch International:** Mobile loans, but institution-to-consumer only
- **Tala:** Credit scoring focus, not P2P
- **M-KOPA:** Asset financing, not general purpose

### Competitive Advantages
1. **P2P Model:** Lower rates than institutional lenders
2. **Trust Score:** Community-based risk assessment
3. **Flexibility:** Peer negotiation on terms
4. **Credit Building:** Portable reputation across platforms

## Risk Assessment

### Key Risks
1. **Default Risk:** Mitigated by trust score, social collateral
2. **Regulatory Risk:** Kenya has clear mobile lending regulations
3. **Fraud Risk:** KYC verification, identity checks
4. **Liquidity Risk:** Minimum lender commitments, platform bridge

### Compliance Requirements
- Kenya Central Bank lending license
- KYC/AML procedures (FRE-484, FRE-490)
- Data protection compliance (FRE-488)
- E-signature legal framework (FRE-491)

## Financial Projections

### Year 1 (Kenya MVP)
- Active users: 1,000
- Loan volume: $250K
- Revenue: $3,000 (transaction fees)
- Operating cost: $150K (team, infrastructure)
- Net: -$147K

### Year 2 (Regional)
- Active users: 10,000
- Loan volume: $2M
- Revenue: $30,000
- Operating cost: $400K
- Net: -$370K

### Year 3 (Scale)
- Active users: 50,000
- Loan volume: $10M
- Revenue: $150,000
- Operating cost: $800K
- Net: -$650K

**Note:** Early losses expected; path to profitability requires scale and premium adoption.

## Funding Requirements

### Seed Round (Current)
- **Amount:** $500K
- **Use of Funds:**
  - Engineering team (6 months): $300K
  - Legal/compliance: $50K
  - Marketing/user acquisition: $100K
  - Infrastructure/operations: $50K

### Series A (18 months)
- **Target:** $3M
- **Purpose:** Regional expansion, team scaling

## Team Requirements

### Current (to be activated)
- CEO: Strategy, fundraising, partnerships
- CTO: Technical architecture, team leadership
- CMO: Go-to-market, user acquisition
- Senior Engineer: Core platform development
- Founding Engineer: iOS implementation

### Hires (Year 1)
- Backend Engineer
- iOS Engineer
- Compliance Officer (Kenya)
- Customer Support (localized)

## Success Metrics

### Product Metrics
- Monthly Active Users (MAU)
- Loan completion rate
- Average loan size
- Repayment rate (target: >90%)

### Business Metrics
- Gross Merchandise Volume (GMV)
- Take rate (revenue/GMV)
- CAC (customer acquisition cost)
- LTV (lifetime value)

### Technical Metrics
- API uptime (target: 99.9%)
- Latency (p95 < 200ms)
- Test coverage (target: 100%)
- Security audit compliance

## Timeline

### Week 1-2: Foundation
- [x] Business plan (this document)
- [ ] Technical architecture (CTO)
- [ ] Marketing strategy (CMO)
- [ ] Legal entity setup

### Month 1: MVP Development
- Database schema and migrations
- Auth integration
- Core API endpoints
- Design system

### Month 2-3: Core Features
- Loan request/approval flow
- Payment processing
- Trust score algorithm
- iOS app alpha

### Month 4-5: Testing
- Beta user onboarding
- Security audits
- Compliance review
- Bug fixes

### Month 6: Launch
- Public launch in Kenya
- Marketing campaign
- Partner onboarding

## Dependencies and Blockers

### Immediate Actions Required
1. **Board Approval:** Legal/compliance documents (FRE-484, FRE-486, FRE-488, FRE-490, FRE-491)
2. **CTO Activation:** Unpause CTO to begin technical planning and implementation
3. **CMO Decision:** Reactivate or redistribute marketing responsibilities

### Technical Dependencies
- All implementation tasks assigned to CTO (currently paused)
- Security reviews completed (all 11 items approved)
- Code review pipeline healthy

## Appendices

### Related Issues
- FRE-449: Micro Lending (parent)
- FRE-452: Design System
- FRE-453: Database Schema
- FRE-454: Auth Integration
- FRE-455: Backend APIs
- FRE-456: Web Frontend
- FRE-457: iOS App

### Legal Documents (Ready for Review)
- FRE-484: ID Verification (Stripe Identity)
- FRE-486: Bank Linking (Plaid)
- FRE-488: Privacy Policy
- FRE-490: KYC/AML Framework
- FRE-491: E-Sign Integration

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**Next Steps:**
1. Board review and approve legal/compliance documents
2. Unpause CTO to begin technical execution
3. Reactivate CMO or reassign marketing tasks
4. Begin Phase 1 implementation
