Lending Crowdfunding: Principles and Market Development

Abstract

Crowdlending has emerged as the leading form of crowdfunding in terms of scope and scale. For lenders, it offers new investment opportunities, often offering better returns than some alternative investment channels, as well as opening to incorporate new small-scale investors that have not enjoyed such opportunities before. For borrowers, it offers new channels to access credit, often either offered at better terms or by including groups that have previously been marginalized and underserved by traditional credit service providers. In the current chapter we present the brief history of crowdlending, its diversity of models, the current state or the industry, as well as the underlying mechanisms and principles guiding platform operations including risk assessment and the matching of borrowers and lenders. The discussion is supported by a review of related research, while highlighting trajectories of industry development trends. The chapter concludes with suggestions for future research and insights for practitioners.

An overview of Fintech applications to solve the puzzle of health care funding: state-of-the-art in medical crowdfunding

“…Lending crowdfunding (also termed crowd-lending, or peer-to-peer lending) is the practice of liaising between borrowers and lenders through web platforms, by-passing traditional financial institutions (Ziegler and Shneor, 2020 ); in brief, funders are paid interest for the money they invest, and their capital is returned at maturity or upon the due date. Equity crowdfunding is based on the principle of a digital, online marketplace where entrepreneurs can access a large pool of potential investors who, in return for a stake in the ownership (equity), may fund the ventures (Estrin et al 2018 ).…”

Architecting rural smartness: A collaborative platform design for rural digital business ecosystem

“…Figure 7 shows the application usage viewpoint for this use case. It follows the common processes of marketplace lending that are summarized from the work of Wang et al (2015) and Ziegler and Shneor (2020). The process starts with a loan request registration, where the rural business unit, as the borrower, registers the necessary information on their loan proposal in the funding module of the rural smartness platform.…”

“…Online marketplace lending is a digital service that matches borrowers with lenders. It facilitates a large number of people to invest a relatively small amount of money in investment projects proposed by the borrower (Ziegler & Shneor, 2020). With more people able to make contributions as investors for small businesses, online marketplace lending is seen as a promising means for rural businesses to raise funds (Eniola & Entebang, 2015).…”

Služby hromadného financovania založené na požičiavaní a ich daňové aspekty

“…Napriek tomu, že povaha výkonu činnosti hromadného financovania môže vzbudiť u nezainteresovaných subjektoch dojem, že poskytovateľ tejto služby vykonáva aj činnosť platobných služieb, je potrebné zdôrazniť, že povolenie na poskytovanie služieb hromadného financovania nie je rovnocenné s povolením na poskytovanie platobných služieb. 18 Poskytovateľ služieb hromadného financovania nemôže poskytovať platobné služby, pokiaľ na to nemá oprávnenie podľa smernice o platobných službách. Zároveň sa na poskytovateľa služieb hromadného financovania vzťahuje povinnosť informovať, či platobné služby poskytujú priamo oni alebo tretia strana.…”