Getting a loan is generally hard. With over 1.4 billion people worldwide having no access to banking services at all, loans are something out of this world. Even in the seemingly best economy in the world, the USA, over 63 million people have no access to traditional finance.
Being unbanked or underbanked doesn’t necessarily mean being poor. These people simply don’t fit into the traditional scoring system of banks, and the good news is that they can become a customer base for innovative FinTechs that provide:
- More flexible credit scoring methods
- More affordable P2P lending solutions
- Have a low market entry barrier with smart risk assessment technologies.
Rise of P2P Lending
Peer-to-peer (P2P) lending is a quickly expanding FinTech sector enjoying high demand among users with limited access to traditional loans. The 2021 P2P lending market’s size was evaluated at $83+ billion, and its growth estimates lead us to a mind-wrecking figure of $1+ trillion by 2050. Thus, it’s evident that this financial model is here to stay, and it’s time to enter the market with an innovative digital lending platform.
P2P Platform’s Pros and Cons
The P2P lending model quickly gained traction because of:
- Low interest rates for users
- Considerable returns for businesses and lenders
- Broader access to finance
- Smart creditworthiness assessment algorithms
- Flexibility
However, P2P lending comes with elevated risks for all participants, such as:
- Higher credit risks
- Legal nuances
Still, the financial market is favorable for launching a P2P lending app, and here we talk about this venture in-depth — https://rndpoint.com/blog/p2p-lending-platform-cost/. Visit our blog to learn what critical pointers you should consider before building a money lending app, understand how such apps work, and estimate the cost of building such a FinTech software product in 2023.
