The Lending Center

Status: v0.1 draft. Counsel-drafted plain-language summary (non-binding). Activation gated on (a) registration of a Members' own co-operative legal form in each jurisdiction, (b) the binding /legal/ documents (counsel posture confirmed 2026-06-05) this charter references, and (c) calibration data from the micro layer.

The summary on this page is not the legal contract. The Member Borrowing Agreement, Member Funding Agreement, Risk Disclosure, Collateral Terms, and Loss Waterfall Disclosure govern the actual relationship.

What it is, in one paragraph

The Lending Center is a district inside Circlworld where Members can borrow from and contribute capital into co-operative lending pools that their circles and federations have built up. Lending is co-operative, in the tradition of credit unions, SACCOs, and the ASCA/VSLA model — Member money pooled together, Member-governed, lent back out to Members. It is not balance-sheet lending by a bank.

Who actually lends — and where the money actually sits. (Read this twice.)

Circlworld is not the lender. Circlworld does not hold money. Circlworld does not move money.

And inside the Lending Center, the money never sits in a Treasurer's account. Lending pool capital, the Circle Protection Reserve, loan disbursements, and collateral escrow are Category B under the Custody Framework Charter; the rule is escrow-only and Member vote does not apply. Pooled monies live in a dedicated multi-signature lending account, opened in the name of the Circle's (or federation's) own co-operative legal form, custodied at an account-provider bank or credit union (the account provider is never the lender), and audited.

The Custody Framework recognises three categories of money flowing through a Circle, each with its own rule. Within the Lending Center we are always operating in Category B (or Category B + C for cross-border Circles); Category A — regular cycle contributions in single-jurisdiction Circles, which may be Member-to-member by Member vote — is outside this surface.

Inside the Lending Center, the escrow-only rule applies at every level:

At the lending-pool level (L0, L1, L2). Each lending pool has its own dedicated multi-signature account, distinct from any other account the Circle maintains, opened in the name of the Members' co-operative legal form in the pool's jurisdiction.
At the federation level (L1+). Federation pools have their own elected Lending Committee and their own dedicated account.
For collateral escrow + the Circle Protection Reserve. Same rule — dedicated multi-signature account, account provider is custodian only, Member vote does not apply.

A Treasurer is never a sole signatory on a Lending Center account. The Treasurer may be one of the Lending Committee's mandated signatories only if elected to the Committee in their own right. The Custody Framework Charter explains why this rule is constitutional (loss-asymmetry, regulatory regime, the Lender Model architecture) and not subject to the Member-vote choice that governs Category A.

How a lending pool is established

A lending pool is never created by a single Treasurer or coordinator deciding "let's start lending". It is a structured governance act with three required steps:

The establishment vote. Members of the circle (L0) or the federation (L1+) vote on a proposal to establish a new lending pool. The proposal specifies: pool level, jurisdiction, initial capital target, reserve %, loan-to-pool cap, concentration caps, withdrawal notice period, and proposed Lending Committee size. The vote requires the quorum and supermajority documented in the Lending Pool Establishment Terms.
The dedicated account. On a passing vote, the Members' co-operative legal form in the pool's jurisdiction opens a dedicated account in its own name for this pool. The account reference is recorded on the pool's ledger; multi-signature mandate is filed with the account provider. The pool does not activate until the account is open, verified, and recorded.
The Lending Committee. The membership elects a Lending Committee to manage the pool: review and approve loan applications, monitor repayment, declare defaults and execute the waterfall, oversee the reserve, and report to the membership. The Committee's structure, election process, term limits, conflict-of-interest rules, and replacement procedures are governed by the Lending Committee Terms.

Only after all three steps are complete does the pool's status flip to active and loan applications open.

The Lending Committee in one paragraph

The Lending Committee is the governance body for a single lending pool. It is not the circle's Treasurer; it is not the federation's coordinator; it is not a Circlworld employee. It is a body of elected Members from the pool's funder base, with documented roles (chair, secretary, committee treasurer, members), term limits, recusal rules, and accountability to the Membership through periodic reporting and re-election. The Committee makes loan decisions by recorded vote; no individual Committee member can disburse a loan alone. The full terms are in the Lending Committee Terms.

What Circlworld is:

The underwriting engine — the formulas that decide who can borrow, how much, secured or unsecured, against what.
The governance engine — the multi-signature approval flow, the dispute pathway, the audit trail.
The record-keeper — the ledger reflection of what happens on the Members' co-operative side.

What Circlworld is not:

Not a lender. Not a bank. Not a credit provider. Not a deposit-taker.
Not the counterparty to your loan. Not the counterparty to your funding contribution.
Not the entity you sue if a loan goes wrong.

The lender is your circle (at L0/L1) or your federation (at L2) — acting through its own member-constituted co-operative legal form. This is the circle's / federation's own collective vehicle, registered in your jurisdiction — not a separate or third-party entity. Your loan contract is with your circle's / federation's lending pool, in its own co-operative form. The pooled capital sits in a dedicated multi-signature lending account opened in the name of that co-operative form; a bank or credit union may custody that account as account provider only and is never the lender. Your fellow Members are the pool contributors behind it.

The circle's / federation's own co-operative form is named in the Member Borrowing Agreement and again on the loan disclosure form before you sign anything. If a loan is not offered through your circle's / federation's own registered co-operative form in your jurisdiction, it is not happening.

How the levels work

| Level | Where capital comes from | Where it lends to | Ships | |---|---|---|---| | L0 — Circle pool | one circle's members | members of that circle | first | | L1 — Affinity federation pool | ~10 circles bound by a real institution (church, alumni network, workplace) | members of those circles | first | | L2 — Regional/National federation pool | many circles, one jurisdiction | larger projects (e.g. a circle hall, housing) | Year 3+ | | L3 — Cross-jurisdiction | not available | not available | not on the roadmap |

One jurisdiction per pool. No exceptions. Unsecured lending never crosses a border. This is the design choice that keeps the circle's / federation's own co-operative form registrable, the regulator one body, and the courts the right courts if anything goes wrong.

How much you can borrow without collateral

Reputation sets the ceiling. Capacity sets the floor under it. The formula is the same at every level; only the parameters shift:

unsecured = min( standingBudget, affordabilityCap ) × poolMultiplier
            clamped to the pool's unsecured ceiling

In English:

Standing budget — how much your earned trust (Standing, completed clean circles, loans repaid) is worth in pounds.
Affordability cap — what you can demonstrably repay each month, multiplied by the term, multiplied by a debt-to-income ratio (30% by default). This is the responsible-lending guard. Standing can never lend you more than you can repay.
Pool multiplier + ceiling — the pool's appetite for unsecured exposure. L0 (everyone knows everyone) → higher. L2 (strangers across the jurisdiction) → lower, often zero on a first loan.

The lower of standing-budget and affordability-cap wins. The pool ceiling caps the result. Below the pool's Standing floor, you don't get any unsecured headroom — the whole loan must be secured.

The "Capacity" room inside the Lending Center shows you these numbers for every pool you could borrow against, before you ever apply.

When you need collateral

For a loan of amount A, the secured portion is max(0, A − unsecured). If A ≤ unsecured, no collateral. If A > unsecured, the excess is collateralised, or the loan shrinks to your unsecured ceiling, or it's declined.

Beyond that, full security is required regardless of your unsecured headroom when:

Your first L2 loan, with no platform repayment history.
You're within a 12-month default cooldown.
A cross-jurisdiction loan above the Standing floor (rare; only the top-tier path).
The loan exceeds the pool's unsecured ceiling.
The affordability check fails at the unsecured size.
Your Standing is below the pool's floor.

Acceptable collateral types are documented in the Collateral Terms document. The three core types are:

Cash deposit in escrow — same currency, instantly liquidatable, ~95% LTV.
Pledged future hand-payout — assigning an upcoming circle payout to the lender; ~80% LTV after timing + circle-default haircuts.
Guarantor commitment — a co-signing Member, joint-and-several with you. The guarantor's own unsecured trust capacity is consumed; only Members with spare capacity above their own borrowing can guarantee.

External assets (rare for thin-file borrowers) are accepted case-by-case.

Standing itself is not collateral. Standing is what makes the unsecured portion possible. What you forfeit on default is the Standing itself — see the Loss Waterfall Disclosure.

What happens if a loan defaults

The recovery order is the same at every level; only the weighting shifts:

Posted collateral is liquidated (cash escrow, pledged payout, or guarantor call).
Your own stake in the lending fund is set off.
Future hand payouts you're due from circles are intercepted at source.
The fund or federation reserve is drawn against.
Any residual is shared by the pool's funders. By design, this residual is bounded — never more than the unsecured trust the pool deliberately extended to you.
Your Standing is severely penalised. A Financial Reliability Record is written that is portable across the platform. Your borrowing is frozen. The platform may also review for membership action.

The full waterfall, with the invariant ("maximum uncovered loss is a number you set, never a surprise"), lives in the Loss Waterfall Disclosure.

What pathway you have if you disagree

Most disputes about lending are small (an installment marked late, a balance you don't recognise, a guarantor consent you didn't intend). Those go through the Dispute Settlement Centre like any other circle dispute — Stage 1 Conciliation Office, Stage 2 Mediation, Stage 3 Decision Room. The pathway, eligibility thresholds, and what each stage costs are in the Lending Dispute Pathway document.

Large defaults — your jurisdiction's small-claims threshold or above — are not resolvable inside the platform. They proceed in the courts of the jurisdiction where the pool was registered. The Member Borrowing Agreement and Member Funding Agreement choose the court of competent jurisdiction for both sides; you cannot opt out of that.

What Circlworld guarantees and what it does not

Circlworld guarantees:

The underwriting formulas are applied consistently. Every loan disclosure shows the inputs that produced the unsecured/secured split, so you can check the math.
The audit trail is immutable. Pool state, loan disbursement, repayment, default — every step is recorded and visible to the borrower, the funders, the Members' co-operative, and (in dispute) the DSC.
The waterfall runs in the documented order. The platform does not skip steps or change the order to favour a specific party.
The governance role is separated from the key to the vault. The Treasurer or coordinator can propose a loan; the multi-signature approval (members + vehicle) is what executes it. No single human can disburse funds.

Circlworld does not guarantee:

Repayment. You don't get your money back if the borrower defaults. The waterfall reduces your loss; it does not erase it.
Loan availability. Whether a pool exists, whether it has capacity, whether you qualify — these depend on the pool, the jurisdiction, your Standing, and the Members' co-operative's call. We do not promise any specific loan to any specific Member.
The performance of the Members' co-operative. The co-operative is a separate legal entity, distinct from any of its individual Members. Its insolvency is its own matter, governed by the cooperative / credit-union law of its jurisdiction. The Member Borrowing Agreement and Member Funding Agreement explain what happens to active loans in that case.

Where this charter sits

This is the v0.1 plain-language framing. The binding documents are:

Lending — Member Borrowing Agreement — the loan contract template.
Lending — Member Funding Agreement — the staking contract for Members putting capital into a pool.
Lending — Pre-Borrowing Risk Acknowledgement — what you confirm you understand before signing a loan.
Lending — Pre-Funding Risk Acknowledgement — what you confirm you understand before staking.
Lending — Collateral Terms — security types, LTV, escrow.
Lending — Guarantor Terms — joint-and-several, consumed unsecured capacity, call procedure.
Lending — Loss Waterfall Disclosure — default recovery order and the invariant.
Lending — Dispute Pathway — DSC stages, real-world thresholds.
Lending — Pre-Contract Credit Information (PCCI) — the statutory pre-contract form required in each jurisdiction.
Platform Indemnification — the limits of Circlworld's exposure for both borrowers and funders.
Jurisdiction Disclosures — country-specific addenda (currently UK and Jamaica).

Each of those documents carries its own status badge. None of them go binding until counsel signs off in the named jurisdiction and the vehicle is registered there.