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Peer-to-peer lending is the practice of matching borrowers and lenders through online ‘Marketplace Lending’ platforms and apps. Borrowers are often able to gain access to funds quickly, and, typically at lower interest rates than when borrowing from more traditional lenders like banks. The loans issued are often comprised of many different investors ranging from individuals to institutional investors.
Individual and professional investors benefit by being able to lend money at a range of interest rates based on proprietary credit scores assigned by each platform. Since investors typically fund only a portion of a loan and spread the amount they loan across many buyers, investors can potentially receive steady, attractive returns while spreading the risk across multiple borrowers. Marketplace lending platforms leverage technology to interchangeably evaluate and process loan requests through fast, highly efficient, streamlined loan approvals. Marketplace lending is quite different to bank structures because these lending platforms do not take deposits or lend their own capital. Instead, they essentially serve as brokerage firms to match up the lenders and the borrowers, and then they take a fee for operating the lending platform.
Such non-bank lending has seen exponential growth: the sector has grown from its infancy in 2006 to US$12 billion in 2014, and is expected to reach US$122 billion in loan origination volume by the end of 2020. Alternatively, the traditional consumer loan market issued US$840 billion in loans in 2014, so it would be rather hard to predict that marketplace lenders currently pose a significant threat to the banks.
QUINTAR CAPITAL, however, can be used to your advantage, not only as an expert in marketplace lending platforms but also as an experienced investment partner, with extensive European and pan-Asian knowledge.
Of course there is always a modicum of risk in all investing. And this is especially true with regards to marketplace lending. On the other hand, like all investors, potential debt investors who want to lend via marketplaces can ultimately work with the experts at QUINTAR CAPITAL to strategize, discuss and decide on the appropriate tolerance for risk.