Question

Do you feel financial technology startup companies such as Neighborly should be offering municipal bonds through collaborative software solutions and a crowd lending platform? Does this new technology present any business risks that didn't previously exist in the U.S. and International markets?

Answer 1

As far as municipal bonds are concerned the financial consideration would be to

1.Have adequate reserves carried forward upto the date of redemption

2. Invest in securities which maturity period matchs with redemption of municipal bonds

For interest payments

1.will there be adequate profits earned during the years ,can check the Interest coverage ratio

2.otherwise provisions must be made for interest payment regularly

since they are start ups they may not be able to obtain loans municipal bonds are better alternative

failing which companies may lose reputation

Risk associated with crowd funding would be it is highly disorganised and unregulated and the sources through which they reach out for funds must be effective