The P2P (Peer to Peer or Person 2 Person) Lending and borrowing companies are making bold moves in the industry that is re-shaping out and revisioning how things are done in the industry as a hole. By activity allowing for loaning out crypto currencies for interest or borrowing on Crypto Currencies Collateral on it’s platforms were you can loan out your crypto to someone for a specified period for interest once the period is over your crypto will be returned to you plus the interest on top of it in your wallet or borrow against your crypto currencies. With the developments and raise of the NFT token it is quite possible that in the near future you can also lend out your NFT for an agreed upon period for an interest as well or borrow with your NFT as collateral.
As of now MyConstant a P2P lending platform is loaning out Crypto Currencies for it’s customer in exchange for interest and it is the only one that is providing this services to our knowledge there might be 50 – 60 crypto currencies on the platform that is available for loaning out at the moment but make no mistake that list is growing. And the likely hold of other P2P companies to follow suit soon is very high.
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The global peer to peer (P2P) lending market size was valued at $67.93 billion in 2019, and is projected to reach $558.91 billion by 2027, growing at a CAGR of 29.7% from 2020 to 2027. Peer to Peer lending deals with the practice of lending a loan to an individual from another individual without the involvement of bank or financial institution. The key objective of P2P lending is to boost the returns for the lenders and to reduce the rate of interest for the borrowers. In addition, it aids in providing quick and convenient loan, as P2P lending is entirely an online platform industry today.
With the existing available technology right now, the P2P companies are able to reduce costs substantially and have a global reach out with the new emerging technologies that is being developed the possibilities are endless for the future. As with this bold move that is the beginning of a shift from loaning out and borrowing money only to loaning and borrowing anything individuals hold as valuables with a fast transferability and consensus between the agreeing parties which is a much bigger markets with the entire crypto market valued at over 1 trillion dollars in 2021 and the NFT market valued at 35 billion dollars as of 2022, if anything technology has shown time over time that the future is big for new emerging valuables backed by technology during this era and there is no suggest that this will stop any time soon.
The traditional banks has taken three approaches thus far to evolve and compete in today’s market in that particular area they either will buy or invest heavily in one of these emerging P2P Companies, partner with one of them with a unexceptional arrangement in place or build something from scratch which is rear as it is timing consuming, missing out on the right now opportunities, dealing with a completely different culture and process interaction.
There are however, some risks involved like any industry As with any investment, there's risk involved with P2P lending, especially from a lender's perspective. P2P lending platforms can have lower minimum credit thresholds than traditional banks, which would indicate higher default risk on certain loans. Some platforms account for this by evaluating loan applicants and calculating credit risk grades. Lower-rated loans may have higher rates of return, but they also carry more risk.
From a borrower's perspective, you still may not qualify for a loan. And, even if you do, your loan may not be funded if it doesn't garner enough investor interest. Further, like traditional loans, P2P borrowers must still make their scheduled payments in full and on time. Otherwise, they risk defaulting on their loan and hurting their credit scores.
