The paper "Strengths, Weaknesses, Opportunities and Threats of the Peer to Peer Lending" is a perfect example of a micro and macroeconomic case study. P2P lending is a form of hybrid that allows saving and investing and can offer high returns that are different from the traditional conservative methods. This form of financing is gaining popularity among the investors who are more inclined hugely on the on P2P than the previous old savings accounts used to offer them. The act of acquiring huge returns in every potential investment to accrue bigger returns on the relative amount deposited can be enticing and tempting since it does not give the same results for every member who tends to invest.
The challenges for the P2P lending require to enlighten and enough knowledge to allow you to be able to evade the pitfalls during the period of investment. The site offering the peer to peer services is run online, therefore, they rarely incur overheads giving them the ability to offer services that are the way to cheaper compared to the traditional financial service providers (Sonenshein, Herzenstein and Dholakia, 2011).
Due to this act, the lenders are in a position to earn a bit higher returns above the savings, as well as the invested goods that are offered by the banks. The borrowers also are on the liberty of borrowing more money that accrues lesser interest rates, which is after the P2P site has already deducted their fee for allowing you to use their services to get a platform that matches your needs and allows you to check credit for the borrower. This scenario can be defined as having banking services where there is no bank.
The services are also referred to as the crowdlending and the P2P loans are unsecured but the larger amounts are at times lent to particular organizations (Bruton et al. , 2015). At times, the secured loans are offered for high-value commodities such as the jewelry, aircraft, watches, business assets, fine arts, and vintage cars that are used as the collateral for the lent amount. This report will analyze the P2P industry in a general view of its strength, the weaknesses, the opportunities it presents, the threats encountered in the process of offering and receiving the services. 2.0 How P2P works The peer to peer lending is somehow not understood how it works leading to many people making great losses on the process of making uncertain steps.
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