Peer-to-peer lending companies have offered essential funding options by offering small and medium-sized enterprises quick loans at affordable interest rates. The Federal Reserve Bank of Cleveland reported in 2014 that for the majority of borrowers, peer-to-peer interest rates are often lower than those of credit cards. This is complemented with an exceptional user experience for both investors and borrowers. The market is projected to draw more clients in the near future because it is still in its infancy and has little competition. As a result, these elements are anticipated to fuel market expansion over the course of the forecast period.
The value of the global Peer-To-Peer Lending Market was US$ 124.9 billion in 2019 and is projected to increase at a CAGR of 48.2% from 2019 to 2027.
Top Companies in the Peer-to-Peer Lending Industry:
1. Daric Inc.: Established in 2011. A cloud-based mortgage loan origination and risk management software is being developed with a U.S. base of operations to assist clients in managing risk and enhancing the customer experience. By automating application and applicant verification, compliance management, lead management, and digital signing capabilities, the company's software enables financial institutions to manage regulatory change more efficiently, improve the digital customer experience, and manage risk better.
2. Prosper Marketplace, Inc: created in 2005. United States headquarters. Creator of an online marketplace lending platform for linking users with others interested in investing in consumer credit. Using a data-driven underwriting approach, the company's platform offers lists of loan requests with cheap, fixed-rate loans, no hidden costs, and no prepayment penalties, allowing customers to conveniently access affordable personal loans and investors to make returns. Neuberger Berman will invest $75 million in Prosper Marketplace in 2022.
3. Pave, Inc: 2019 saw the founding. United States headquarters. Creator of a platform for managing compensation that will assist businesses in communicating and planning salaries. The platform of the company integrates with the current payroll software to confirm information such as past performance, equity vesting status, and compensation benchmarks to streamline salary planning, enabling businesses to assist employees in overcoming uncertainty regarding tax implications and enhance their compensation package.
4. CommonBond Inc.: Owner of a website that facilitates finance for environmentally friendly projects. The business's platform enables customers to apply for loans transparently and easily, save money, and have a lasting impact. It also offers residential solar financing choices, loans with reduced rates and upfront savings, and a user-friendly online application process. Created in 2011. United States headquarters. NextGenVest is acquired by CommonBond to support expansion and give Generation Z AI-powered financial advice.
5. Social Finance, Inc.: A non-profit venture capital firm situated in London, the United Kingdom, Social Finance UK was established in 2007. The company prefers to invest in the areas of consumer goods and services, financial services, information technology, housing, employment, and the fields of health and well-being, water and sanitation, care, the legal system, and education. Through a merger with SPAC, a company supported by Palihapitiya, online lender SoFi will become public.
6. Upstart Network Inc.: Credit services are provided by Upstart Holdings Inc. A proprietary, cloud-based artificial intelligence lending platform is offered by the business. The platform collects loan requests from customers and links them to Upstart's network of AI-enabled bank partners. Bank fees made up the majority of the company's revenue. Created in 2012. United States headquarters. 2019 saw the announcement of a follow-on offering of 2,000,000 shares of Upstart Holdings, Inc.'s common stock, all of which are being offered by the business (Nasdaq: UPST). The underwriters also have a 30-day option from Upstart to buy up to an additional 300,000 shares of common stock.
7. Funding Circle Limited: Lender Funding Circle was established in 2010 and has its UK headquarters in London. The company operates an online lending marketplace where individuals and institutions can lend money to small businesses. The firm links enterprises in need of financing with individuals and institutions who have funds available for lending. London, England serves as the corporate headquarters of Funding Circle, which was established in 2010.
Definition: P2P lending (peer-to-peer lending) is a type of platform that allows participants to borrow and lend sums of money without having to rely on a conventional financial institution to control transactions.
