Peer to peer lending: what you need to know

In this article we explain peer to peer lending, the business model used by Afroteller.

Peer-to-peer lending (P2P) is a way for people to lend money to individuals or businesses. You – as the lender – receive interest and you get your money back when the loan is repaid.

Peer to Peer (P2P) websites work like marketplaces. They bring together people or businesses that want to lend money with those that want a loan. It’s a way for borrowers to get funding without going to the traditional sources of finance, such as banks and building societies. Any money you lend out is automatically divided between lots of borrowers, but with others, you can choose who you’d like to lend your money to.

The interest rates on P2P lending are typically higher than those available from traditional savings accounts. Generally speaking, the higher the interest rate someone will pay, the higher the risk that they will be unable to repay the loan. With therefore keep our loan interest rates low at Afroteller and minimise risks by ensuring every loan is secured and thoroughly doing all necessary due diligence processes. We keep a percentage of every amount repaid by borrowers on a special account for purposes of cautioning risk in instances were the borrower fails to pay.

To get started lending at Afroteller:

1. Open an account and deposit some money by bank transfer or mobile money.
2. Select a favourable interest rate and period on offer from the listing.
3. Lend an amount of money for a fixed period of time.
4. Start earning monthly interest on the loan repayments.