This action might not be possible to undo. Are you sure you want to continue?
Saujanya P. (Director) Trufis is a digital finance company offering products and services in unsecured consumer credit market. Trufis platform is a Peer to Peer (P2P) lending marketplace /exchange where lenders and borrowers can meet without immediate intervention of conventional financial institutions such as banks. Our robust credit checks and built in controls makes sure that only creditworthy individuals and businesses are allowed to access Trufis market place. Trufis website to come up in 22 weeks FB page created 19 April 2013, 5 likes. The key characteristics of peer-to-peer lending are:
it is conducted for profit no necessary common bond or prior relationship between lenders and borrowers intermediation by a peer-to-peer lending company transactions take place on-line lenders may choose which loans to invest in the loans are unsecured and not protected by government insurance loans are securities that can be sold to other lenders 1. Interest rates set either by lenders who compete for the lowest rate on the reverse auction model, or are fixed by the intermediary company on the basis of their analysis of the borrower's credit Reverse Auction Model A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary auction (also known as a forward auction), buyers compete to obtain a good or service by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers undercut each other. Borrowers assessed as having a higher risk of default are assigned higher rates. 2. Risk Lenders mitigate the risk that borrowers will not pay back the money they received by choosing which borrowers to lend to and by diversifying their investments among different borrowers.
Investors 3. named group. or content by soliciting contributions from a large group of people. providing customer service to borrowers and attempting to collect payments from borrowers who are delinquent or in default . SERVICES Offered on-line investment platform to enable borrowers to attract lenders and investors to identify and purchase loans that meet their investment criteria development of credit models for loan approvals and pricing verifying borrower identity. ideas. this process can occur both online and offline. so that borrowers may be able to borrow money at lower interest rates and lenders earn higher returns peer-to-peer lending tends to have both less volatility and less liquidity FINANCIAL INSTITUTIONS 1. 3. according to the Merriam-Webster Dictionary. the practice of obtaining needed services. the intermediary companies can operate with lower overhead and provide the service cheaper than traditional financial institutions. Deposit takers 2. Often used to subdivide tedious work or to fund-raise startup companies and charities. Insurers Crowdsourcing Crowdsourcing is. where each one on their own initiative adds a small portion that combines into a greater result. Bankruptcy of the peer-to-peer lending company that facilitated the loan may also put the lenders’ investment at risk. It combines the efforts of crowds of self-identified volunteers or part-time workers. Expense Because many of the services are automated. Revenue generate revenue by collecting a one-time fee on funded loans from borrowers and assessing a loan servicing fee to investors. and especially from an online community. employment and income performing borrower credit checks and filtering out the unqualified processing payments from borrowers and forwarding those payments to the lenders who invested in the loan servicing loans. rather than from traditional employees or suppliers.Lenders' investment in the loan is not protected by any government guarantee. Crowdsourcing is different from an ordinary outsourcing since it is a task or problem that is outsourced to an undefined public rather than to a specific. either a fixed amount annually or a percentage of the loan amount 4. bank account.
84% 2. ZOPA. for each saver but the Peer-to-Peer Finance Association mandates . which provides security up to £85. using unscrupulous lenders or misleading consumers about lending terms.5m for a student accommodation property development loan in Nottingham GOVERNMENT ROLE In May 2012. the UK government promised to invest £100 million to small businesses through alternative lending channels.000 per bank. having lent over 81 million GBP 4. hoping to bypass the mainstream banks that are reluctant to lend. including peer-to-peer lenders. legal compliance and reporting finding new lenders and borrowers (marketing) UNITED KINGDOM 1.. RateSetter.57 000 borrowers Bad loans 0. The peer-to-peer companies are predicted to issue up to £200 million of loans in 2012.K. 2005 Issued loans in the amount of 350 million punds 42 000 lenders. FundingCircle first peer-to-business lender to make use of a provision fund to safeguard lenders against borrower defaults FundingCircle is currently the second largest lender. REGULATIONS & STANDARDS In the U. peer-to-peer industry adheres to standards set by the self-governing Peer-toPeer Finance Association Peer-to-peer depositors do not qualify for protection from the Financial Services Compensation Scheme (FSCS). the emergence of multiple competing lending companies and problems with subprime loans has also called for additional legislative measures that institute minimum capital standards and checks on risk controls to preclude lending to riskier borrowers. 2010 first peer-to-peer lender to make use of a provision fund to safeguard lenders against borrower defaults 3. Assetz Capital 2013 lent the largest peer to peer loan in the UK to date at £1.
and 2. the Autorité des marchés financiers in France and Quebec. Interest Rates better rates than traditional bank rates can offer for lenders are higher returns than obtainable from a savings account or other investments interest rates also have a lower volatility than other investment types 2. the Ontario Securities Commission in Ontario. because of their credit status or the lack of thereof.K. are unqualified for traditional bank loans. Because past behavior is frequently indicative of future performance and low credit scores correlate with high likelihood of default. Canada. or the Financial Services Authority in the U.8% for Funding Circle. Credit Risk The UK peer-to-peer lenders quote the ratio of bad loans at 0. This question arises especially when a peer-to-peer lending company does not just connect lenders and borrowers but borrows money from users and then lends it out again.S. ADVANTAGES 1.. the member companies to implement arrangements to ensure the servicing of the loans even if the broker company goes bankrupt The UK government announced that the Financial Conduct Authority will regulate the industry from April 2014 REGULATIONS Dealing with financial securities is connected to the problem about ownership—in case of person-to-person loans. This is comparable to the 3-5% ratio of mainstream banks and the result of modern credit models and efficient risk management technologies used by P2P companies Peer-to-peer lending also attracts borrowers who. The license and registration can be obtained at a securities regulatory agency such as the Securities and Exchange Commission (SEC) in the U. Canada. who owns the loans (notes) and how that ownership is transferred between the originator of the loan (the person-to-person lending company) and the individual lender(s). Such activity is interpreted as a sale of securities and a broker-dealer license and the registration of the person-to-person investment contract is required for the process to be legal.84% for Zopa of the £200m during its seven year lending history. peer-to-peer intermediaries have started to decline a large number of applicants and charge higher interest rates to riskier borrowers that are approved .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.