The History of Lending

The time when goods and services were directly exchanged for other goods and services ended long ago. Money is now a common medium of exchange that is accepted by both trading parties. People started to face the need for banking and money lending not long after money was introduced. In Roman times, for instance, private individuals carried the “banking” function and they were the ones who Romans addressed when they needed to borrow some money.

With the advent of the Internet, many operations became easier to perform as they can be carried out online. Nowadays, people can choose between banking and non-banking lenders, and many of these lenders allow individuals to take loans online. Peer-to-peer (P2P) lending is a relatively new concept, enabling owners of this business to connect individual borrowers and lenders in a low-cost environment, bypassing traditional banks.

Pros and Cons of P2P Lending

P2P lending has a number of advantages if compared to banks or credit unions. The first thing worth mentioning is that lenders get higher returns if compared to other lending institutions. Borrowers also enjoy the advantage of lower interest rates. Online services are another advantage: lenders and borrowers do not have to meet face to face and waste time since all required activities can be taken via the Internet using an Internet browser or a mobile app. Easier approval is one more big advantage.

Those who use P2P lending services should understand that their risks are higher than it seems to be. For instance, there is a default risk for lenders, though P2P platforms try to split their investments into smaller chunks. A credit rating plays an important role, and borrowers with low credit scores have a limited number of options. Regulatory and security issues are other disadvantages of such services.

P2P Lending as a Business Direction

Zopa was the first company to launch P2P loans. Based in the UK, it is still a leading P2P lending company in this country. Prosper and Lending Club were the first ones to offer such services to people living in the U.S. At present, there are many P2P lending platforms offering their services to people in different corners of the world.

An increasing number of people choose P2P lending services. The research company TechNavio expects that this marketplace will grow at a significant CAGR of more than 53% by 2020. So it is evident that the idea of entering this market is an idea that is worth considering.

Which Features Should a Successful P2P Lending Solutions Have?

If you decide to launch your own P2P lending platform, you should first think about features the solution should include. See below some of the features that a good P2P lending platform should have:

  1. The platform should be able to register loan offers from lenders and applications from borrowers.
  2. It should match loans and loan applications according to the terms of an offer.
  3. The solution should be able to spread a deposit of any lender across several borrowers (five or more).
  4. Depositing and withdrawing funds is one more valuable feature.
  5. Event notifications are also important to users of the platform.
  6. You can also enable statements upon requests and operation logs in the solution.

Feel free to read our case study if you want to learn more about features of such a solution.

Is a Web Application Enough?

If you want to make your P2P lending business successful, you should not limit the services you offer to a web-based application which is compatible with as many Internet browsers as possible. Your next step is the launching of a mobile app. People now use mobile devices for many purposes: checking their email boxes, holding meetings, planning their trips, managing a business, and more.

So a mobile app will give you more opportunities to attract users to your platform unlike your competitors who do not have their own apps.


P2P lending has become a very profitable business opportunity. It is chosen by a growing number of lenders and borrowers from pole to pole. People that make use of this service should take into account all advantages and disadvantages it has. They should also pay close attention to the choice of a platform they are going to use.


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