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# Risk Assessment

# For Organization Lender

# Collecticity

  1. If lender has past investments then we add 1 to user risk score for each past investment (maximum 4) else we add nothing.

  2. If lender has invested in crowdfunding then we add 1 to user risk score else we add nothing.

  3. If lender has organization revenue i.e; has capacity to invest then we 3 to user risk score else we add nothing.

  4. If lender has more than or equals to 5 years of investment period then we 1 to user risk score else we add nothing.

  5. If lender has the value of asset in his balance sheet greater than equal to € 5.000.000,00 then we add 4, If greater than equal to € 2.000.000,00 and less than € 5.000.000,00 then we add 3 else we add 2.

# Pepperstate

  1. If lender has past investments then we add 1 to user risk score else we add nothing.

  2. If lender has invested in crowdfunding then we add 1 to user risk score else we add nothing.

  3. If lender has organization revenue i.e; has capacity to invest then we 3 to user risk score else we add nothing.

  4. If lender has more than or equals to 3 years of investment period then we 1 to user risk score else we add nothing.

  5. If lender has the value of asset in his balance sheet greater than equal to € 500.000,00 then we add 4, if greater than equal to € 100.000,00 and less than € 500.000,00 then we add 3 else we add 2.

EXAMPLE

Collecticity

Consider a lender who haven't done any past investment nor invested in crowd funding but has capacity of investment and his balance sheet value is greater than € 2.000.000,00 then his risk score would be 6.

Pepperstate

Consider a lender who haven't done any past investment nor invested in crowd funding but has capacity of investment and his balance sheet value is greater than € 500.000,00 then his risk score would be 7.

# For Individual Lender

# Collecticity

  1. If lender has past investments then we add 1 to user risk score for each past investment (maximum 4) else we add nothing

  2. If lender has invested in crowdfunding then we add 1 to user risk score else we add nothing.

  3. If lender has organization revenue i.e; has capacity to invest then we 3 to user risk score else we add nothing.

  4. If lender has more than or equals to 5 years of investment period then we 1 to user risk score else we add nothing.

  5. If lender has the value of asset in his balance sheet greater than equal to € 250.000,00 then we add 4, if greater than equal to € 100.000,00 and less than € 250.000,00 then we add 3 else we add 2.

# Pepperstate

  1. if lender has past investments then we add 1 to user risk score else we add nothing.

  2. If lender has invested in crowdfunding then we add 1 to user risk score else we add nothing.

  3. If lender has organization revenue i.e; has capacity to invest then we 3 to user risk score else we add nothing.

  4. If lender has more than or equals to 3 years of investment period then we 1 to user risk score else we add nothing.

  5. If lender has the value of ((assetsGrossValue * financialSecurities) / 100) + ((assetsGrossValue * lifeInsuranceAndSavings) / 100) greater than equal to € 500.000,00 then we add 4, if greater than equal to € 100.000,00 and less than € 500.000,00 then we add 3 else we add 2.

EXAMPLE

Collecticity

Consider a lender who haven't done any past investment nor invested in crowd funding but has capacity of investment and his assets gross value is greater than € 500.000,00 then his risk score would be 7.

Pepperstate

Consider a lender who haven't done any past investment nor invested in crowd funding but has capacity of investment and his ((assetsGrossValue * financialSecurities) / 100) + ((assetsGrossValue * lifeInsuranceAndSavings) / 100) value is greater than € 500.000,00 then his risk score would be 7.

# Non Professional Lenders

  • Based on the risk score we have bifurcated lenders into different category (only for non professional lenders)

NOTE

  1. Expert Lender: If lender's risk score is more than or equals to 8.

  2. Intermediate Lender: If lender's risk score is less than 8.

# Not Enough Assets Gross Value Error

  1. First we calculate Risk Score based on the values provided by user.

  2. Based on the Risk Score, we calculate if the lender is Expert or Intermediate (lender is Expert if Risk Score >= 8 or else Intermediate).

  3. Then we calculate Investment Limit of the lender.

NOTE

  1. Formula for finding Investment Limit for Expert is: (Assets Gross Value Max * 20) /100.

  2. Formula for finding Investment Limit for Intermediate is: (Assets Gross Value Max * 10) /100.

EXAMPLE

  1. If Assets Gross Value is between €100,000 and €250,000 then Investment Limit will be €50,000

  2. If Assets Gross Value is between €100,000 and €250,000 then Investment Limit will be €25,000

  1. Then we compare the Investment Limit with Minimum Investment Amount of the platform, if Investment Limit < Minimum Investment Amount then we throw Not Enough Assets Gross Value Error.

NOTE

  1. Minimum Investment Amount for Pepperstate its €500.

  2. Minimum Investment Amount for Collecticity its €50.

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