How P2P Lending is Transforming the Financial Services Industry

It is important to recognize the role peer-to-peer investing plays in the financial services industry, especially to the majority of the population that cannot afford to secure loans from mainstream lenders like commercial banks. When people have easy access to financial services, they can make use of investment opportunities that they come across. This can in turn lead to improved living and economic empowerment.

Companies that have come out to offer financial services to those who cannot attain them from mainstream banks and other financial institutions have devised packages that can suit the needs of their clients. For example, in peer-to-peer lending, clients do not have to produce collaterals in order to secure loans. Many people, especially from rural areas, may not have the collaterals needed by commercial banks yet they are in need of financial services to enable them to participate in improving their lives and their communities.

The main goal of providing peer-to-peer investing services is to empower people by giving them financial assistance that is easy to work with. The services offered at this level have more benefits to the target group compared to what they can expect from the traditional lenders. P2P lending works more like a personal private loan and the borrower has the opportunity to use it for various reasons. In peer-to peer lending, the whole process takes place online. This enables the borrower to apply for the loan anytime, even in the comfort of their own homes. For the investor, it comes with a higher interest rate of up to 11%. Security for the loan may be a real estate or commercial investment. For borrowers, the loans, which have a fixed maturity period of between one and three years, are important for starting up various development projects.

From peer-to-peer investment services, they get small loans to start economic projects, insurance packages that are suitable for their needs, or they can get financial assistance to use toward buying their homes. These financial packages are often tailored to the conditions and circumstances of the borrower. From whichever side you see it, the borrower or investor’s perspective, peer-to-peer investing is a revolutionary financial service in modern society.


Vincent Garibaldi

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