The most famous peer-to-peer lending platform referred to as “Irish loan fund” was built in the 1700s by a famous Irish author, Jonathan Swift. This platform was supported by his vision to provide credit to low-income rural families. Swift’s focus was to lend money with minimal or no interest. By the 18th or 19th century, the demand for P2P lending platforms increased in Europe and other regions.
The very first online P2P lending platform dates back to 2005 where about more than 2.8 billion GBP were lent by the consumers of the UK. It works on the same vision of Swift and Mohammad Yunus who popularized the idea of microfinance. Now, the motive of P2P lending platforms is to bring the unbanked population under the scheme of finances. Further with the fall of Lehman Brothers in the year 2008, peer-to-peer lending platforms picked up the pace.
With the integration of cryptocurrencies into P2P lending platforms, the way of lending and borrowing has revolutionized. It provides a greater sense of efficiency, transparency and scalability of the operations. The integration of blockchain into P2P lending platforms has majorly formulated the feasibility of the tokenization of loans. This invisible technology is visibly changing the outlook on how the operations of P2P lending would operate.
To kick off your P2P crypto lending exchange, you need to be well versed with the ins and outs of building such a platform.
For establishing your P2P lending platform, you need to have a clear focus and a business model. So let us outline the various steps one by one which would guide you to perfectly create your P2P lending platform.
First and foremost, you need to outline which kind of loans you would like to generate as a company. It is better to specialize in one or two kinds of loans rather than engaging in all kinds of loans. The forms of loans can be categorized as rental purposes, auto loans, mortgage loans, personal loans and others. It is an imperative step to recognize your business model before moving towards the next levels.
To make your business law-abiding, you need to register your P2P crypto lending exchange in the countries where you wish to operate your transactions. Make sure to legally abide by the country, province, state or territorial laws where your platform would be registered. By doing this, your business’s search engine would be appropriately optimized for every targeted country.
This refers that everyone who is concerned should be on the same page. This further means that all the parties should be following the same practices, conditions and rules. It helps in maintaining the fairness and integrity of transactions.
You need to establish contact with people who are in different areas. Formulate contact with agencies or individuals who are in marketing, advertising, or consultants. Form connections with the business attorney or project managers to navigate your business in the right direction. Develop communication with local startups, advisors who are in the same industry.
You need to be well aware of the 4P’s of the marketing that are as follows;
Familiarize yourself with the marketing philosophy and establish your lending platform to benefit from the current marketing trends of a P2P lending platform.
The integration of blockchain technology into the lending platform has encouraged faster and much cheaper transactions for the borrowers and lenders. The following are the underlying benefits of a P2P crypto lending exchange.
With a P2P lending platform, there are regular and continuous earnings for the platform owners. As the platform includes minimal charges for processing transactions, unlike banks take around on an average of 2% of transaction fees for the processing of transactions, a lot of new borrowers and lenders are attracted to the P2P lending platform. The more the number of users, the more would be the revenue for the platform owners.
With a P2P crypto lending platform, you can reach the global masses. It is not restricted to a defined region or any boundary. As in the case of banking structure, they would only be able to cater to the needs of nearby customers due to the limitations of different rules and regulations of every region. Hence with the P2P lending platforms, you can target the worldwide individuals. So it acts as a win-win situation for all the parties as borrowers and lenders from across the globe are able to meet at a marketplace without any restriction of the boundary. And even the exchange platform owners are not limited by the boundaries.
The conventional banking structure involves a lot of paperwork and managing the same is cumbersome. But on the other hand, the P2P lending platforms eliminate the paperwork and automate the activities involved in borrowing and lending. You are effectively able to save a lot in terms of manpower and costing.
If you are considering developing your P2P crypto lending platform, we can help. We offer a white label P2P lending platform, underpinned by industry-leading features, which accelerates deployment and reduces the development cost. Besides, we can build a fully-customized P2P lending platform for you, right from scratch, based on your business model.
Schedule a free demo of our white label P2P lending platform, or connect with our subject matter experts to share your needs for a custom lending platform.