Invest in collective finance or better known with peer to peer lending P2P. This term seems to be new here but it is not, the case is at that time, with the emergence of several fintechs of loans and financing, the term peer-to-peer has been much more publicized than before.
The when P2P bid is beyond it to serve people who are borrowing money, the other side of the line has the one who can use the platforms to invest their money exactly in the role of lender, ie investor. In peer to peer, people like investor profile can put their money to work yielding good monthly profits.
Investing in collective financing
Who makes investments as a means of making money, usually makes conventional applications such as Public Debt Securities, Direct Treasury, Bank Deposit Certificates (CDB), Credit Letters, Real Estate (LCI), Agribusiness Credit Letters (LCA) , Fixed Income Funds, Debentures and even Exchange here in Brazil. However there is an alternative to investing as much more advantages and little known, at least until the moment that are Private Debt Securities – we can call loans between people – or the best known and English-accented form that is peer- to-peer lending that has arrived in Brazil with full force.
It is possible to start investing in collective P2P financing and have good profits
What is peer-to-peer lending?
The loans in the peer to peer model is facilitated thanks to the connection of the borrowers with the possible investors of the platform. The borrower does not have to be subjected to all the bureaucracies required in the traditional banking system as long as interest rates are far more attractive.
In peer to peer, the credit model enables people to borrow from each other without the intermediary of a bank . Before the arrival of this new model of credit, already famous in America and Europe, Brazilian merchants and entrepreneurs were able to obtain loans for companies only in the private banking institutions.
In collective financing platforms, the operation is agile, secure and unbureaucratized, with excellent service and still a breakdown, peer to peer loans offer much lower interest than banks and financial.
Peer to peer finances both individuals and legal entities of the most varied economic profile. It also accepts novice and veteran investors looking for greater profitability that is available in the segments already mentioned in the third paragraph. Who invests in P2P can profit much better than CDB or direct treasure.
Is peer-to-peer collective funding regulated?
Yes. In Brazil, peer-to-peer lending is carried out through a linked asset transaction (OAV), which is an operation regulated by the Central Bank in accordance with Resolution No. 2,921, dated January 17, 2002. These securities are then linked by the financial institution behind the business.
Who facilitates collective P2P funding?
In all the continents we find fintechs of collective financing , there are hundreds of peer-to-peer lending platforms operating in various modalities, it is undoubtedly a great market that moves billions of dollars in the world and real in Brazil and that is in full growth even by here in Tupiniquins lands. In Brazil there are not so many P2Ps in operation but we can say that the quantity is already making all the difference in the financial market.
The peer to peer fintechs operate as bank correspondents as legal support, these partnerships are made with institutions such as Socinal, Omni, Bmg and many others.
What are the risks to the investor?
Every form of investment has its risks, in the peer to peer, formalization is a linked operation, the main risk for the invested is simply the non-payment of the loan or financing by the company or the borrower of the credit.
However, the risks can and are reduced with the application of advanced credit analyzes created and adopted by online personal loan platforms. Another way to reduce losses with delinquency is the diversification of assets.
The tip is to make capital investments in only one bond of a company, but to distribute the capital by various securities of companies and thus dilute the risk of larger losses. In general, peer-to-peer platforms have tutorials and a knowledge base that teach diversification and more accurate credit analysis.
Is it worth investing in peer to peer lending?
Every investment is valid, especially if it offers and yields good returns, and peer to peer is a form of investing that promises yields above the average of the market bonds. If you have money to invest, this is certainly an excellent alternative for diversification.
Peer-to-peer lending has generally offered very good rates of return mainly for the work of the platforms, which has reduced risks for investors. When it comes to small and medium-sized businesses, in addition to microentrepreneurs, some provide full financial reports on companies to assist the novice or advanced investor as the best for decision-making.
In this type of investment the investor has monthly repayments, so when you talk about liquidity you do not have to question, it makes it easier to reinvest the money or use as you wish.
What is the profitability of peer to peer?
Profitability is not fixed, it may vary on each platform you use to invest, but the income is in the range of 95% to 150% of the CBD (12% to 16% pa). To be successful, we return to the old scoop that must be turned to credit analysis and to maintain diversification in applications.
How to start investing in collective financing?
Now if you want! To facilitate I have listed some peer-to-peer lending platforms that you can already start to study the possibilities for investment. In Brazil some of the platforms that offer the peer-to-peer lending loan for individuals and companies. They also serve as investment platforms between them:
- Kavod Lending
To have access, most are no frills or impossible terms and rules, none of them, just make the registration, fill in basic identification data and risk profile, done that already have immediate access to investment opportunities. Ready!
To have more chances of real profits, the platforms have a newsletter with opportunities and tips for diversifying the portfolio to invest in collective financing for registered investors. Good luck!