Liwwa

Liwwa implementation process:

• Loan Application: The borrower fills in and completes the loan application with ease through Liwwa's platform.

• Document Collection and Site Visit: Liwwa reaches out to collect the necessary documents and conducts a site visit to the borrower's business.

• Lending Decision: Liwwa provides a lending decision within just 2 days after the site visit and document collection.

• Signing the Loan: The borrower can sign the loan agreement either at Liwwa's office or at their own business location.

• Fund Disbursement: Once the loan agreement is signed, the borrower receives the funds.

Liwwa customization process:

• Custom-Tailored Innovation Programs: Liwwa offers custom-tailored innovation programs for corporates and governments, indicating a capacity for customization to meet specific requirements.

• Credit Analysis Engine (mCAE): Liwwa uses a proprietary credit analysis engine, mCAE, which analyzes various data points such as operational years, suppliers, customers, cash flow, and the legal and commercial background of the loan applicant. This engine can be tailored to predict the likelihood of loan repayment, demonstrating a high level of customization in credit assessment.

• Automated Lending and Scoring System: Liwwa employs an automated lending and scoring system specialized for the SME segment. This system can be customized to streamline the lending process and improve efficiency.

• Digital Technologies for Credit Analysis and Rating: Liwwa uses smart digital technologies for credit analysis and rating, which can be adapted to provide affordable, collateral-free loans to SMEs. This customization helps in making quick lending decisions and providing loans within one or two days.

• Application Tracking System: Liwwa has built an application intake and tracking system from the ground up to manage the SME loan underwriting funnel from origination to completion. This system allows for efficient decision-making and communication between Liwwa’s teams, indicating a high degree of customization in the loan application process.

• Optical Character Recognition (OCR) Tool: Liwwa uses an OCR tool that automates the reading of digitally scanned bank statements, which borrowers send. This tool can be customized to improve the efficiency of data processing and loan approval.

• Marketplace Model: Liwwa operates a marketplace model that provides access to alternative sources of funding. This model can be customized to meet the specific funding needs of different businesses by allowing individual and institutional investors to fund loans directly.

• Integration with Other Applications: Liwwa’s platform can integrate with other applications to provide a better customer experience. For example, it can integrate with CRM systems to automatically provide customer information, enhancing the customization of business processes.

• Educational Resources: Liwwa provides a variety of educational resources through its website, including detailed guides and FAQs to help users understand the platform and its functionalities.

• Customer Support: Liwwa offers direct support through phone calls for both borrowers and investors. The support team is available during office hours to assist with any queries or issues.

• Onboarding Assistance: For new users, especially borrowers, Liwwa's team assists with the loan application process, document collection, and understanding the terms of service.

• Encryption: Liwwa uses encryption to protect data during transmission and storage, making it unreadable to unauthorized parties.

• Secure Protocols: The platform employs secure protocols to ensure that data exchanges are protected from interception and tampering.

• Data Security Policies: Liwwa has stringent data security policies in place, which include regular updates and patches to close any security gaps.

• User Role Definition: Access to data is restricted based on user roles, ensuring that only authorized personnel can access sensitive information.

• Regular Security Audits: Liwwa conducts regular security audits to identify and mitigate potential vulnerabilities in its systems.

• Regular Updates: Liwwa releases updates frequently to improve system functionality, add new features, and fix bugs. These updates are part of their service delivery and are provided at no additional charge.

• Automated Update Process: For cloud-based installations, updates are deployed automatically. For private cloud and on-premises installations, updates are released quarterly and installed using an automated and validated procedure.

• Pre-Release Testing: Updates are first deployed to an acceptance server for validation before being released to the production environment. This ensures that any issues can be identified and resolved before the update goes live.

• Notification System: System administrators are notified three weeks prior to the installation of software updates, allowing them to prepare for and ensure minimal disruption to operations.

• Hybrid Funding Model: Liwwa operates a hybrid funding model that includes partner banks and retail investors. This model allows for flexibility in scaling operations by leveraging different funding sources.

• Partnerships and Agreements: Liwwa has entered into strategic partnerships and agreements to secure funding and support for scaling operations. For example, the agreement with the Capital Bank of Jordan for a $10 million revolving line of credit and the partnership with the Dutch Entrepreneurial Development Bank’s NASIRA Portfolio Guarantee Programme. These partnerships provide the necessary liquidity and risk-sharing mechanisms to scale up lending activities.

• Investment in Technology: Liwwa continuously invests in technology to improve its credit assessment process and operational efficiency. This includes the development of proprietary credit models and the implementation of faster, more flexible financing options. Such technological advancements enable Liwwa to scale its operations efficiently.

• Geographical Expansion: Liwwa has expanded its operations beyond Jordan to Egypt, targeting a larger market of MSMEs. This geographical expansion is part of its strategy to scale up its business model in the MENA region.

• Funding Rounds and Capital Raising: Liwwa has successfully raised significant capital through various funding rounds, including Series A and Series B investments. These funds are used to fuel growth and support scaling efforts.

• Flexible Loan Products: Liwwa offers a range of financial products, including Sharia-compliant loans, trade finance, and working capital solutions. This diversity in product offerings allows Liwwa to cater to different business needs and scale its services accordingly.

• Operational Efficiency: Liwwa has implemented a comprehensive revamp of its platform, including improved onboarding and application tools for borrowers. This enhances operational efficiency and supports scaling by reducing processing times and improving user experience.

• Risk Management: Liwwa's partnership with institutions like the U.S. International Development Finance Corporation (DFC) and the French development finance institution (Proparco) provides additional support for managing risks associated with scaling operations.

• Contract Renewal

• Definition and Process: Contract renewal involves reinitiating a legal agreement upon the expiration of the original contract. This can be done with or without renegotiated terms. Renewals provide a chance to reassess and amend the terms and conditions of the original contract.

• Legal Framework:

• Renewals may need to consider new legal or regulatory changes that have come into effect since the original contract was signed.

• A comprehensive legal review is often required to ensure that all conditions are up-to-date and legally compliant.

• Advantages: Renewing a contract allows for the updating of terms to reflect current business needs, market conditions, or technological advancements. It provides an opportunity to renegotiate pricing, service levels, and other critical terms.

• Risks: Missing a renewal date can lead to automatic renewal under potentially outdated terms, which may not be favorable. Poor management of renewals can result in legal repercussions, financial losses, and service disruptions.

• Contract Cancellation

• Termination Clauses: Liwwa reserves the right to terminate access to its services at any time, with or without cause, and without prior notice. Termination can occur if the user fails to comply with the terms of service or the investor agreement.

• Liabilities and Indemnification: Liwwa disclaims all warranties and limits its liability for any special, incidental, or consequential damages.

• Users agree to indemnify and hold Liwwa harmless from any claims arising from the use of the website or violation of the agreement.

• Governing Law and Dispute Resolution: The terms and conditions are governed by applicable laws, and any disputes are subject to the jurisdiction specified in the agreement.

• Investor-Specific Terms: Investors face the risk of losing part or all their investment if Liwwa ceases to exist or becomes insolvent. Liwwa conducts a thorough assessment of borrowers' credit risk, but investors must decide on investments that suit their risk appetite.

• Practical Examples

• Contract Renewal: If a cloud service contract is about to end, renewal allows updating terms to include more storage space at a better price or improved support options.

• Contract Extension: If both parties are satisfied with the current terms, an extension can continue the agreement without changes, often documented as a simple addendum.

• Compliance Standards and Practices

• Know Your Customer (KYC) Requirements: Liwwa requires investors to satisfy KYC requirements by providing accurate, current, and complete information, including proof of identity and address.

• Credit Risk Assessment: Liwwa conducts thorough credit risk assessments using a proprietary credit analysis engine (mCAE) to evaluate the creditworthiness of loan applicants. This involves analyzing operational years, suppliers and customers, cash flow, and the legal and commercial background of the applicant.

• Data Privacy and Security: Liwwa places significant emphasis on data privacy and security, ensuring that all transactions and data handling comply with relevant data protection regulations. This includes measures to protect against data breaches and unauthorized access.

• Regulatory Compliance: Liwwa ensures compliance with local and international financial regulations, including those related to anti-money laundering (AML) and counter-terrorism financing (CTF). This involves continuous monitoring and updating of compliance practices to adhere to evolving regulatory requirements.

• Investor Protection: Liwwa informs investors about the risks associated with investing through its platform, including the potential for borrower defaults and the lack of a secondary market for loans. Investors are advised to diversify their investments to mitigate risks.

• Service Fees and Transparency: Liwwa's service fees are only applied when borrowers make scheduled repayments, ensuring that the company's incentives are aligned with those of the investors. The details of these fees are transparently provided on Liwwa's website.

• Sharia Compliance: Liwwa offers Sharia-compliant loan products, ensuring that its financial services meet the ethical and legal standards of Islamic finance.

• Partnerships and Funding: Liwwa collaborates with various international and local financial institutions, including the U.S. International Development Finance Corporation (DFC) and the Dutch Good Growth Fund (DGGF), to ensure compliance with their respective funding and operational standards.