Difference between revisions of "Peer-to-peer Lending"
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== Definition == | == Definition == | ||
| − | '''Peer-to-peer Lending''' (''also P2P lending'') is an organizational model where [[Lending products]] (loans) between individuals or businesses are arranged through a service that matches directly lenders with borrowers without the intermediation of a central counterparty (e.g a | + | '''Peer-to-peer Lending''' (''also P2P lending'') is an organizational model for [[Banking]] financial services where [[Lending products]] (loans) between individuals or businesses are arranged through a service that matches directly lenders with borrowers without the intermediation of a central counterparty (e.g a [[Bank]]). |
== Characteristics == | == Characteristics == | ||
| − | Peer-to-peer lending typically must reconfigure | + | Peer-to-peer lending typically must reconfigure core aspects of the [[Lending Product Lifecycle]]: |
* a platform to enable borrowers to meet lenders and investors to identify and purchase loans that meet their investment criteria | * a platform to enable borrowers to meet lenders and investors to identify and purchase loans that meet their investment criteria | ||
| − | * the verification of borrower identity | + | * the verification of borrower identity ([[KYC]]) |
* performing borrower credit checks and filtering out the unqualified borrowers | * performing borrower credit checks and filtering out the unqualified borrowers | ||
* the development of credit models for loan approvals and pricing | * the development of credit models for loan approvals and pricing | ||
Latest revision as of 12:40, 5 March 2024
Definition
Peer-to-peer Lending (also P2P lending) is an organizational model for Banking financial services where Lending products (loans) between individuals or businesses are arranged through a service that matches directly lenders with borrowers without the intermediation of a central counterparty (e.g a Bank).
Characteristics
Peer-to-peer lending typically must reconfigure core aspects of the Lending Product Lifecycle:
- a platform to enable borrowers to meet lenders and investors to identify and purchase loans that meet their investment criteria
- the verification of borrower identity (KYC)
- performing borrower credit checks and filtering out the unqualified borrowers
- the development of credit models for loan approvals and pricing
- processing payments from borrowers and forwarding those payments to the lenders who invested in the loan
- Loan Servicing, providing customer service to borrowers
- collect payments from borrowers who are delinquent or in default
- legal compliance and reporting
