Peer-to-peer lending

From the early days of human civilization means of trade and commerce has evolved from barter system to paper money, and now to cryptocurrency. All with an aim to make transfer of money more convenient and quick. Whether you buy groceries or pay for a flight you need to have a quick payment access, eliminating the dependency of cash.

You may not think you are participating in a revolutionary experience when you transfer your friend $7 for food on Venmo. But since the advent of fintech, short for financial technology, the financial services industry has been turned on its head. Whether purchasing coffee at your local coffee shop or managing your finances, fintech is all around us.

Financial Technology (Fintech) refers to the technological developments taking place within the finance industry, particularly those that concern themselves with improving the delivery of financial services. Online banking and investing services are part of fintech. There are a number of areas where fintech has been utilized. These include insurance, risk management and even trading. They can either be provided by private service providers or by the government sector. What both require is a licensed insurer or bank.

Fintech has been used for many of the newest technological developments – from payment apps like PayPal(PYPL) – Get Report  or Venmo to even cryptocurrency. Combining the latest technological developments with financial services or applications, fintech has helped businesses – largely start-ups – disrupt the industry and provide better financial services to businesses and individuals alike.

From all these financial innovation comes an easy and hassle free way for borrowing loans. Without any time taking bank formalities and even credit history. Here comes a portal called Funding Circle that does so with a concept of Peer-to-peer lending.

Peer-to-peer (P2P) lending is when an individual borrows money from other individuals. Similarly, peer-to-business (P2B) lending is when a business borrows money from one or multiple individuals. These lending models are making it easier for investors to get better returns than those offered in debt markets by giving their money to pre-approved and vetted borrowers. Funding Circle provides a platform to match borrowers with lenders and usually take a fee from the borrower’s repayment.