Peer-to-Peer Lending
Peer-to-peer (P2P) lending is a financial technology platform that directly connects borrowers with individual or institutional lenders through online marketplaces, bypassing traditional financial intermediaries like banks. It enables borrowers to access loans with potentially lower interest rates and faster approval processes, while lenders can earn returns by funding loans. These platforms typically use algorithms to assess credit risk, set interest rates, and facilitate transactions.
Developers should learn about P2P lending when building or working on fintech applications, as it involves key technologies like secure payment gateways, credit scoring algorithms, and regulatory compliance systems. It's used in scenarios such as personal loans, small business financing, and real estate crowdfunding, where automation and data analytics improve efficiency and accessibility. Understanding P2P finance helps in developing scalable, secure platforms that handle sensitive financial data and integrate with banking APIs.