Many of us read numerous peer to peer lending reviews and also saw some online posts of it. Peer to peer lending industry is flourishing itself worldwide. This industry started to raise their wings or can say established from San Francisco in the year 2006, now it’s been 7 years and still, this industry is growing in a well straight manner. It is estimated that only 25 percent of lending is responsible from the tradition banks in the US.
As per the market research lending clubs and few of the market leaders have been responsible for one billion dollar investment into the citizens of US and their venture. Now let’s talk about the growth of peer to peer lending industry.
The Growth Of Peer To Peer Lending: This industry is appreciated by all the government officials and small business owners. During the global recession period in 2008 when few of the small firms were asked to restructure their business after the Securities and Exchange Commission (SEC) all kind of loans were restricted as securities at that moment this industry get the best of its growth.
The most important question now for this industry is whether the same growth will continue as the global economy begins to improve.
Backlights: Well, it is said that where there is a growth there are some dark lights also. These peer to peer lending companies only serve a mediate transaction so, as the result of it, these companies gives the obligation to treat the people who are working in the firm as their regular employees and all the privileges and rights related to them.
Workers don’t get the benefit of medical insurance, no retirement policy, tax withholdings or other such benefits provided by other companies to their regular employees. In short, workers lose their rights.
The Risk In Peer To Peer Lending: Previously the risk migration system floated the cash in 10 euro bites amongst the different-different borrowers. But the system has been changed to improve the quality. The fund you borrow from the borrower effectively spread the impact of worst debt finance across all the savers. In this game, money stuck in the mixed risk basket of borrowers.
If the borrower will not repay the amount, Safeguards pays that amount to the lender with the interest. After the payment, safeguard funds owed the bad debt and take help of the third party to recover the loss.
After knowing all the growth, risk and drawback factors of this peer to peer lending, it is quite easy for you to involve in such industries. So at the end, it is obvious that there is the benefit of both the side for the consumer and also for the end users as they give a convenient and effective life every day to the consumer.
Those companies which are providing these peer to peer lending transaction facilities are the most lovable of Silicon Valley with raising record amounts of the capital funding and high valuations.