This will all end in tears.
What sort of system is in place for collection on loans in default? Is there, or are their plans for, a system for asset backed loans?
Thanks for the question, it's a serious issue we're dealing with! However, please do note that we're in beta, so we don't have a solution for collecting on loans in default yet, i.e. the loans are unsecured. However, we're exploring solutions to allow us to collect on defaults or to partner with organizations that can easily collect on the borrowers (there are a number of those that already exist in the BTC community). We do know that our major competitor also has unsecured loans and people have funded over 15K worth of BTC loans through their system, so we know that unsecured lending occurs on a large scale. The major difference is that we have some skin in the game: we don't collect the loan fee (of 1%) until the payments start rolling in, so if a borrower defaults then we lose revenue.
But again, I want to emphasize that we know that a collection solution is needed and we will roll one out as soon as possible. Furthermore, we're also looking to make strategic partnerships with other institutions which will provide us with more borrowers whose loans can be secured through the partnering institution. All in due time of course, but it's one of those huge things on our radar.
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