Authors : J.B. (dbektemissov), JeremyKim, mans9841
Summary : Goldfinch protocol borrowers, namely, credit funds submit a monthly credit report.
The proposal is to provide the beginnings of a standardized framework for Credit Fund Borrowers to provide a reasonable degree of transparent reporting for various investors on the Goldfinch platform. It is very important to note that this framework is only a starting point - as the Goldfinch platform grows, and both the borrower base and investor base grow and evolve, we envision the reporting template to grow and evolve in sophistication and transparency as well.
As a community of backers, we demand that credit funds deliver credit reports monthly at the “Borrower Level” and “Investor Level” (more in the Specification & Requirements section). For now, this reporting obligation for credit funds should be viewed as a requirement set by the Goldfinch investor community at large, independent of any additional compliance requirements.
Specification & Requirements:
Participants of the protocol sign a Non-Disclosure Agreement (NDA) and have access to the borrower’s data room. We propose that borrowers open a new folder in the data room named “Remittance Reports” and upload an updated report every month.
Remittance report for each month (cutoff date being the last day of that month) should be published no later than 15 calendar days after the start of the subsequent month. If any borrower is unable to submit a report by the above deadline, they should notify the investors and provide adequate justification, as well as a tentative reporting date (this also encompasses instances of retroactive corrections, amendments, or restatements of previously submitted remittance reports).
The report’s publication should be announced through verified/token-gated channels to ensure that backers and FIDU holders are notified.
We are attaching a template in an Annex to this document as a standardized minimum that the borrowers need to report on a monthly basis. However, nothing prohibits reporting more than the specified minimum, instead, it can set good practices.The reporting should be at “Borrower Level” and “ Investor Level”.
For the purposes of this reporting template, “Borrower” refers to the borrower creating and managing the pool on Goldfinch. This is effectively a Borrower pool’s balance sheet and cash flow statement for any given reporting period. It describes the pool’s lending exposure to downstream fintech borrowers and associated collateral pledged to the pool. It also details movement of funds between a pool, its borrowers and its upstream investors (backers and the senior pool liquidity providers) for the reporting period.
In addition to detailing movement of funds, the template will report on borrower pool’s portfolio delinquency metrics and adherence to any financial covenants imposed on the borrower pool by GFI protocol (vis a vis its lending portfolio - delinquency, concentration limits etc.).
This is an investors’ (backers and senior liquidity providers) view of their monthly exposure to a borrowing pool. It details USDC allocation between junior and senior pools and movement of USDC to and from investors as a result of capital deployment by a borrower pool and as a result of interest and principal repayments made by a pool back to investors.
Example Reporting Structure: see proposed template
- Increased transparency for both FIDU and Backer Investors
- Reduces anxiety for less-sophisticated investors such as retail and family offices
- Borrowers who present transparent reports gain more trust and reputation
- Standardization of reporting metrics for other members of the community to build additional analytics and benchmarks
- Institutionalization of reporting structure
- Supports credibility and growth of Goldfinch DAO
- Slight operational burden for Borrowers on the Goldfinch platform
- We believe there is no downside to the investors nor the broader Goldfinch community
Voting : “Yes” - Borrowers submit credit reports monthly. "No” - Do nothing.**
Resources : see proposed template
Authors : @jkim, @J.B., @mans9841