In the field of financial technology, Huma Finance is redefining the concept of lending with its innovative "Time Value of Money" (TVM) model. This approach is fundamentally different from traditional lending models, which primarily rely on collateral and risk spreads.

Huma's TVM model is based on a simple yet profound economic principle: current funds are more valuable than an equivalent amount in the future because they can be put to use immediately and generate more value. This concept has not been fully utilized in traditional lending.

Traditional lending systems often struggle to handle future income streams. For example, even if a person has a stable future salary, they may find it difficult to obtain a loan when they urgently need funds, or they may only be able to borrow a very small amount. This practice effectively wastes the potential value of current funds.

In contrast, Huma's model effectively converts future income into current cash flow. For example, if someone has a monthly salary of 10,000 yuan and a total income of 120,000 yuan for the coming year, Huma's system calculates the present value of this future income and provides a corresponding loan amount based on this, typically between 70% and 90% of the expected income.

Huma's approach not only allows borrowers to better leverage their future income but also automates the evaluation and lending process through smart contracts, significantly improving efficiency and accuracy. This innovation is not just a change in the lending method, but a revolution in the perception and utilization of the value of funds.

Overall, Huma's TVM model represents a significant breakthrough in financial technology within the lending sector, providing new interpretations and applications for the time value of money, and is expected to offer more flexible and efficient financing options for a wider audience.