Usually collateral is supposed to be equal or more than the amount borrowed, especially in a situation like this where there is no 'credit score' to use to determine likelihood of default.

The protocol doesn't have a credit score. That's a concept better suited for the application layer built on top.

Right, which was why my point was that the collateral is probably going to be at least equal in value to whatever is borrowed.

Dharma Protocol doesn't require that the value of collateral be greater than the principal of the loan, but we do expect the market will demand full- or over-collateralization.