The video answers questions around: What is P2P lending? What is debt-based crowdfunding?
What is the difference between crowdfunding and bank loan? How does the lending model of crowdfunding work?

Examples of the debt based crowdfunding market are LendingClub, Prosper, Funding Circle, Upstart, GoFundMe, Indiegogo, SoFi, Rally.org. Founded in 2012 by Mumbai-based Varun Sheth, Ketto is Asia's largest crowdfunding platform catering to individuals, entrepreneurs and NGOs. Examples in Africa would be Zidisha, a peer-to-peer lending network that enables individuals to lend money to entrepreneurs or Lendable in Kenya that offers loans to individuals and small businesses or M-Changa that enables people and groups to gather funds for charity purposes such as medical bills or education.

Lending-Based Crowdfunding process
In this session, we are going to learn about the main actors of Lending-Based Crowdfunding and the process of Lending-Based Crowdfunding.
What are the main actors in the Lending-Based Crowdfunding process? The main actors are the lenders, the borrowers, the Lending-Based Crowdfunding platform and the partner banks. The lenders, also called backers, search for an investment alternative to invest in. The borrowers are project owners and advertise their ideas to invest in as well as state the terms they are willing to offer as a return for lender´s contribution. The Lending-Based Crowdfunding platform provides a framework for the contractual terms and conditions, sends contracts to the parties and coordinates repayments. The partner banks gain new customers and build new or strengthen client relationships.
The platforms operating in Germany use an assignment construction. First of all, the borrower submits a loan request, indicating his or her desired loan amount and monthly payment. In parallel to the first step of the borrower, a private investor invests his money on the Lending-Based Crowdfunding platform and specifies his desired interest rate. In the loan application process, the borrower provides information about his income and expenses and confirms these with different documents.
The platforms in the USA also use a model in which there is no direct conclusion of a contract between the parties. The process of the Debt Dependent Notes is very similar to the assignment model in Germany. First of all, the borrower submits a loan request, indicating his or her desired loan amount and monthly payment. In parallel to the first step of the borrower, a private investor invests his money on the Lending-Based Crowdfunding platform and specifies his desired interest rate. In the loan application process, the borrower provides information about his income and expenses and confirms these with different documents. The Lending-Based Crowdfunding platform performs a credit check with the documents required for the credit rating. In addition to contact data, which is also used to determine relocation behavior, the data collected for the credit rating primarily includes credit transactions, such as the number of credit cards and loans, mobile communications contracts, checking accounts, and mail-order customer accounts. If the loan application is successful, the borrower is provided with several offers from partner banks cooperating with the Lending-Based Crowdfunding platform.
Once the loan has been approved, identification takes place via Video-Ident or Post-Ident and the signed loan agreement is in turn sent directly to the partner bank. In order to be listed on the Lending-Based Crowdfunding platform, the partner banks have to pay commissions to the Lending-Based Crowdfunding platform for each successfully concluded contract.

To summarize the presentation there are three takeaways you should keep in mind. First of all, there exists no real Peer-to-Peer Lending due to the regulation in Germany and the USA. There has to be a bank involved in the Lending-Based Crowdfunding process. In the Lending-Based Crowdfunding process there exist two different processes, on one side the Assignment model in Germany and on the other side the Debt Dependent Notes in the USA. The difference between both processes is the seller of the loan receivable. In the Assignment model the partner bank sells the loan receivable to the investor. In contrast to the Debt Dependent Notes where the Lending-Based Crowdfunding platform sells the loan receivable to the investor.
The videos explain different fintech business models and refer to the book Fintech Business Models by Matthias Fischer published in February 2021.
The channel covers fintechs in the area of payments, robo advisory, Personal Finance Management, crowdfunding, artificial intelligence, blockchain, cryptocurrency and innovative digital solutions in banking.

свернуть