What is P2P lending?

P2P stands for “peer-to-peer”. P2P lending is a financial service for issuing loans in which the creditor is not a bank or credit institution, but rather he/she is an individual or a collective of individuals. On P2P lending platforms, investors and borrowers interact directly. But how much demand for P2P lending is in the world? And how trustworthy is P2P crediting?

The short answer is that P2P lending has a strong and growing demand. P2P lending platforms have given both investors and borrowers a sense of trust. For example, billions of U.S. dollars in loans have been issued via P2P lending platforms in the United States, and the same is true for many countries around the world. For borrowers, they can find a place to get much needed financing without financial intermediaries. For investors, they enter a place that provides checks on potential borrowers (rejecting those from that platform that do not meet necessary requirements). Moreover, their earnings from these platforms are 2-5 times greater than they could earn on deposits in banks. In other words, P2P lending is a modern form of lending that is likely to gain in popularity as the concept becomes more widely-known and accepted.