Topic: Islamic Bank of Bitcoin{}بنك بتكوين الاسلامي - page 20. (Read 112806 times)

It looks like the main  demographic here is 12 year old kids who do not have any real money and who are staring little websites who get their $0.10 adsense money a month.

In the rich countries you are competing with credit cards (that typically charge 20%/year) and the payday loan companies that loan you money based on your next pay statement (that charge > 20%/year).

My guess is that a lot of IBB customers should just learn to wait, and to not buy things on credit when they don't need to.  Americans (and Canadians) are very bad at saving money.

Hmm, you could ask people to submit a credit score or social security number.  Is there a way to verify this information?

Why do people need 3-5 BTC short term loans?  If you are in a rich country that is very little money. Typically people can get that kind of money from their friends or with a credit card.

If IBB is loaning money to people who cannot get credit cards or whose friends and relatives won't let them the money - then IBB is taking huge risks.

It only really makes sense to do small loans to people in poor countries -- to people who don't have computers and are using the money to establish or improve a small business. And in that situation, people need longer term loans.

It will stay at $10, there is a psychological barrier at $10.

Looks like IBB is in deep shit right here, their is about 30 BTC of loans that haven't been paid back by the due date, so that's about $300 down 

It shouldn't be in an anonymous environment. I think the probability simulation above by Deprived gives a good hint

(though 6 months is *very* optimistic, 1 month after the due date should be considered a default,
let's face it if they didn't pay back after a month it wont happen after ½ a year)

If a loan payment can't be enforced by the legal system, collection agencies, repossession etc... It's not an asset.
You can't sell the debt nor does it have any market value because you gave it away to a complete stranger with no collateral or ID verification.

Nobody is going to pay for obtaining this type of long overdue/unpaid loan
because there is practically a 0% chance of ever getting any return on your investment.

So in the case of IBB lending small amounts of BTC, debts are only liabilities & net losses until paid back / given gratuity.

I was only saying 5 posts as an example. You would have to see the correlation between the number of posts and paid back to set the limits.
I wonder how many people have 200 posts....I know what your goal is, and I wish you success, but I hope you didnt cut off your foot to save your toe.

For that problem, well, I think I would release that requirement, and put instead a sliding scale....for example 5 posts can borrow 2 bitcoin, 10 posts can borrow 3 bitcoin, etc....could be adjusted for people who recommend them.

Do you have better ideas? I'd like to hear them. No that's not sarcasm.

Yeah, but the business is basically kaput. 200 posts? How many people is that? How many need a loan?

Nevermind.

Before we got derailed by recent forum threads, I was about to post something on the board regarding how brilliant it is, in my opinion, to have an Islamic Bank of Bitcoin.

Kudos to you... this could be a significant player in the Bitcoin community in the not too distant future.

w00t!

Have you visited GLBSE.com ?

I'd like to see a balance sheet report that compares the balance sheet with the market value for the shares, and analyzes how the balance sheet (net assets) has changed since the start of the company.

Report August 2011



Income / Revenue

• Dividend 2x SIN shares = 0.01518 BTC 27/7/11
• Dividend 2x SIN shares = 0.0229181 BTC 10/8/11
• Dividend 2x SIN shares = 0.0142274 BTC 18/8/11
• Dividend 2x SIN shares = 0.0115842 BTC  25/8/11

Loans

• -------------------------------Repaid----------------------------------------------------------------------------------------
• 2 BTC loan to 'bitmole'  pay back -  25/8/2011 {paid back + 0.20 gratuity}
• 5 BTC loan to 'shakaru' pay back -  8/9/2011 https://bitcointalksearch.org/topic/no-longer-trading-on-this-forum-for-a-moment-32039 {paid back + 2.00}
• 5 BTC loan to 'Yuusha'  pay back -  9/9/2011 http://forum.bitcoin.org/index.php?topic=32192.20 {paid back + 0.50}
• 5 BTC loan to 'dub0matic' pay back - 5/8/11 https://bitcointalksearch.org/topic/in-need-of-a-loan-33472 {paid back + 0.20 gratuity}
• 1 BTC loan to 'Electronic Chaos ' pay back - 8/8/11 https://bitcointalksearch.org/topic/another-small-personal-loan-thread-33479 {paid back + 0.05 gratuity}
• 1 BTC loan to 'whirlpool ' pay back - 8/8/11 https://bitcointalksearch.org/topic/looking-for-a-small-loan-33547 {paid back + 0.021818 gratuity}
• 5 BTC loan to 'mc_lovin' pay back - 8/8/11 https://bitcointalksearch.org/topic/loan-declaration-33558 {paid back}
• 5 BTC loan to 'seanpd16' pay back - 8/8/11 https://bitcointalksearch.org/topic/--34019 {paid back}
• 5 BTC loan to 'JackRabiit' pay back - 13/8/11 https://bitcointalksearch.org/topic/closedibb-loaning-requestclosed-34123 {paid back + 0.15 gratuity}
• 5 BTC loan to 'lolcat' pay back - 21/8/11 https://bitcointalksearch.org/topic/loan-request-34144 {paid back}
• 5 BTC loan to 'DannyM' pay back - 8/8/11 https://bitcointalksearch.org/topic/loan-request-34739 {paid back + 0.05 gratuity}
• 5 BTC loan to 'mc_lovin' pay back - 13/8/11 https://bitcointalksearch.org/topic/loan-declaration-2-36090 {paid back}
• 2 BTC loan to 'mike85123' pay back - 14/8/11 https://bitcointalksearch.org/topic/ibb-loan-request-35784 {paid back + 0.02}
• 5 BTC loan to 'Trini8ed' pay back - 20/8/11 https://bitcointalksearch.org/topic/5-btc-loan-37007 {paid back + 0.25 gratuity}
• 3 BTC loan to 'teflone' pay back - 23/8/11 https://bitcointalksearch.org/topic/loan-request-37620 {paid back + 0.25 gratuity}
• 3 BTC loan to 'shakaru' pay back - 25/8/11 https://bitcointalksearch.org/topic/3btc-loan-for-glbse-listing-37944 {paid back + 2.00}
• 2 BTC loan to 'theflyingdutchman' pay back - 21/8/11 https://bitcointalksearch.org/topic/2-btc-request-37847 {paid back + 0.03 gratuity}
• 1.50 BTC loan to 'Sh1337' pay back - 21/8/11 https://bitcointalksearch.org/topic/need-15-btc-loan-2btc-pay-back-38183 {paid back + 0.06 gratuity}
• --------------------------------Default---------------------------------------------------------------------------------------
• 3 BTC loan to 'Ryuguy' pay back - 17/8/2011 http://forum.bitcoin.org/index.php?topic=33268.0 {default}
• 5 BTC loan to 'NoValues ' pay back - 29/8/11 https://bitcointalksearch.org/topic/need-a-loan-33548{default}
• 5 BTC loan to 'shlft' pay back - 23/8/11 https://bitcointalksearch.org/topic/closed-loan-request-34656{default}
• 4 BTC loan to 'laydum' pay back - 13/8/11 https://bitcointalksearch.org/topic/need-a-loaninvestment-read-for-details-34509{default}
• 5 BTC loan to 'ex0420' pay back - 10/8/11 https://bitcointalksearch.org/topic/loan-request-35678 {default}
• 5 BTC loan to 'btcace' pay back - 17/8/11 https://bitcointalksearch.org/topic/loan-agreement-35750 {default}
• 5 BTC loan to 'JCbit' pay back - 16/8/11 https://bitcointalksearch.org/topic/5btc-loan-request-36150 {default}
  

Donations

• 0.08749867 BTC 3/8/11 *used for glbse fees
• 0.01 BTC 13/8/11 *used for glbse fees
• 0.11 BTC 18/8/11 *included in revenue/income paid out as dividend
• 0.55 BTC 20/8/11 *included in revenue/income paid out as dividend

Joint Ventures - Musharakah

• Bitcoin Starter             -    www.bitcoinstarter.com        -  ticker symbol - BST 40% ownership

• NEW company listed on GLBSE.com   BH - Bitcoin Holdings new Joint Venture company : operating 2 websites, details soon.

Gratuity /Revenue so far from loans:-


 0.20
 2.00
 0.15
 0.05
 0.021818
 0.05
 0.25
 0.25
 0.02
 0.20
 2.00
 0.03
 0.06
 0.50
 

Donations:-

0.11
0.55

Dividend from SIN shares:-


0.01518 BTC 27/7/11
0.0229181 BTC 10/08/11
0.0142274 BTC 18/8/11
0.0115842 BTC 25/8/11

total =6.5057277 profit/revenue->$65.00 @ current market rate[/list]

Dividends will be paid on 30th August -6.5057277 BTC will be paid (6.5057277/1000=0.0065057277 per share)

Well broadly speaking (ignoring the terminology of how it's defined) there's two ways of doing it:

1. A binary system - where each debt is either valued at full or written off.  This is similar to the "direct write-off" system in your link - with the same weakness that it leads to overvaluing of accounts receivable (as deliquent debt is treated as full value until it's totally clear it'll never be paid off).

2.  Writing the debt down over a period of time.  This is similar to the "allowance method" in your linked system - where accounts receivable are amrked down based on various factors over time (and eventually totally written off).


Method 2 is (imo) clearly the better - and is what my spread-sheet is a simplistic version of.  Simplistic, as the only factor I used is amount of time the debt was overdue by.  Had no option but to simplify in this fashion - as there's no other information (I had) to allow valuation of individual debts based on a wider range of criteria.  It is a safe assumption that the longer a debt has been delinquent for, the lower it should be valued (unless there are other factors indicating a specific exception).  So that's where I started.

I do agree with you that a debt doesn't even need to be overdue to be written-off (or written down).  An obvious example would be if someone took a loan then stated they were scamming and logged off for good.

After a little research, it seems the generally accepted accounting practice is to set up a bad debt reserve and subtract uncollectable debts from the reserve at the end of each accounting period. Apparently determining whether a debt is uncollectable or not is completely arbitrary and based on the reasonable expectation of repayment. That is completely subjective. In fact , the loan doesn't even have to be in default and it can still be deemed uncollectable.

Like you said though, it can be used an accounting gimmick by marking the value of the debt to fantasy.

I tend to think accounting like this really is a gimmick. I'll try and dig up how bad debts were historically treated before the current credit money system.

I dug this up on the way.
http://www.coveringcredit.com/business_credit_articles/Credit_Management/art254.shtml

It's not my argument that what my quick spreadsheet does was the ideal way to account for delinquent loans.  My point was that they must be accounted for in some way - and currently weren't.  They definitely have a value below the principal loaned - and that needs to be reported in some way.  The way in which IBB handles them is likely to be different to the way in which they're dealt with "normally" for a few reasons:

1.  Usually a large portion of deliquent loans would be sold off to debt-collectors at a discount.  It's doubtful that could be the case here.
2.  Normal requirements for reporting are based upon tax and accounting requirements.  Which I'd guess aren't going to be especially relevant here.  Hence we can (if we choose) report things in a fashion which focusses on reporting (as much as possible) the "real" value of delinquent loans rather than complying with tax/accounting requirements.

Do bear in mind that a significant part of recent economic troubles was CAUSED by banks etc over-valuing investments/debts that were unlikely to ever be realised at listed value.  There's no reason to be doing the same here.

I DO agree that the delinquency rate should drop with the much tigher requirements to get loans.  Were I doing the record-keeping I'd also be tempted to keep stats relating to each loan - things like number of posts/number of good references etc.   Then, down the line, you could actually start looking at what (if any) correlation there was between certain factors and delinquency.   It's entirely possible, for example, that certain requirements could actually have a correlation in the wrong direction.

A couple comments.  I appreciate the spread sheet however I don't think this is how lenders account for delinquent loans. That being said, this isn't a pure credit money system. Therefore the current accounting mechanics (realization of losses) might not be good. It takes along time for an original creditor to mark a loan "uncollectable" versus "charged off". Charged off loans can still be sold.

I'll go back and look over some old bank accounting books when money use to be a commodity and see how they accounted for it. Hopefully I can figure out their gibberish.

We are actually treading over old ground here. They didn't have ID a couple hundred years ago so I'm sure they had the same dilemmas.

Second point is the 200 post requirement is a fresh policy.  70% or more of the data collected is based on an old model. The rate of default will hopefully change.