Do you ever have like an insanely amazing business idea at 2:00 am and think “Wow! I should really have my own business! If only I had the funds to go through with it”? Well, now you can! Peer-to-Peer (P2P) lending is the new and improved way to break away from traditional loan-banking systems.
What is P2P Lending?
Getting a loan from a bank is a rigorous and time-consuming process. There are many requirements that maybe not all young individuals with great ideas have. Then came P2P lending. It’s a FinTech lending system for individuals or businesses that removes the middleman - banks – from the process.
What’s in it for me?
Investors might ask why would they even put their money in a place that doesn’t have the same security and trust as banks? Well, money talks! As an investor, you earn a better return on your investment than through traditional methods.
But is lending money to strangers online a good idea? You can’t even trust money with the people you know *cough* the Tinder Swindler and Anna Delvey *cough*! But P2P platforms let you choose where do you want to put your trust? Think of it like a dating profile but instead of choosing a lifetime partner, you’re choosing a financially-reliable one… or not!
It’s all about how much you’re willing to risk! You get to choose if you want a high-risk, high-reward loan which means that you get higher interest. Or you can go with low-risk, low-reward loans AKA lower interest but more reliable. Take your pick!
For borrowers, there are plenty of benefits, where to begin! P2P lending doesn’t limit you to business or mortgage loans but you can take out a loan for personal reasons. Whether it’s for a tour around Europe, buying a house, car, or even a new cell phone, it has got you covered!
Another advantage is that it’s just one click away! Convenience wins over anything in this weather, tbh! Of course, P2P platforms, just like banks, also do a background check on borrowers’ income, credit score, etc… before giving you the okay for the loan.
P2P lending is not a new concept in the FinTech world, it’s been around since 2005. However, it’s not common in the MENA region. That’s not entirely a bad thing, it just means that there’s an opportunity for new start-ups to dip their toes into that pool.