# Investor Protection

**Bankruptcy Remote SPV:** Every lending pool on Qiro Marketplace has a separate SPV setup which protects the investors from bankruptcy 

**Over-collateralisation:** Based on underwriting, the asset originator are required to pledge additional portfolio as collateral to the [SPV](https://docs.qiro.fi/qiro-marketplace-product-guide/legal-structure). Typically, the LTV would be 60-70% for these fintechs. e.g $6M loan would required borrower to pledge $10M worth off-chain assets.

**Cash Reserves**: We will also require the asset originators to deposit cash into reserves which can be utilised in case of missed repayments or default scenarios to make the investors whole.

**Excess Interest Spread (EIS):** The spread between asset originators interest rate and what they pay to stablecoin investors on Qiro is the first buffer to cover defaults. e.g if the asset originator earns 15% on the loans, they will typically pay 10-12% to stablecoin investors on Qiro.

**Junior Tranche Protection:** Every lending pool on Qiro will be have junior tranche where the underwriters will have to put capital to support their decision. This can also be filled jointly by underwriters + asset originator. Typically it’s \~20% of the whole pool.\
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On top of this, we perform rigorous credit underwriting before approving the loan and have integration into asset originator's platform to track different information covenants(bank balance, financials, NPAs, profits, losses etc) which can trigger event of default if the agreed covenants thresholds are breached.

<figure><img src="/files/vS1onUWRalfBQCUgmK7h" alt=""><figcaption></figcaption></figure>


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