Community Lending

January 18th, 2024 (about 1 year ago) • 2 minutes

There is a growing number of people who don't have the necessary credit history to obtain a loan from a bank. This is particularly true for individuals from underprivileged backgrounds or those without a steady income stream.

Life is unpredictable, and there are times when people need to borrow money to navigate through a rough patch. For instance, $100 might determine whether someone can afford groceries for their family's dinner. Compared to the high-interest rates charged by B2C loan servicing platforms like LendingClub and Prosper, a peer-to-peer lending platform can offer much lower rates and lower minimums for borrowers.

There are multiple platforms that does this in the US. But the most famous one would be SoloFunds. I think this is great but if you look into Reddit, there are a defaults that are not being paid back. And the incentives for the lender is not really clear.

Some of the key things that I think would be important for a peer to peer lending platform which future platform could do better:

• Incentives for the lender to lend money - High interest rate with appropriate risk, quick returns
• Incentives for the borrower to pay back the loan - Flexible repayment schedules, higher limit for future loans, (blacklisting)
• How to detect potential fraud and scams
• Ranking system to match suitable lenders and borrowers
• An intelligent way to collect money from the borrower if they default - For example, look into borrower's bank account history to determine when is the best time to collect money
• Platform sustainability
• Better UI/UX - no more clunky 2000s website / apps

The potential market includes underdeveloped countries where access to credit cards and banks is limited. This represents a significant opportunity to aid those in need.

If anyone is willing to pick this up, let's talk and we can work something out.