Peer-to-Peer Lending
Peer-to-peer (P2P) lending is a financial technology platform that connects borrowers directly with individual or institutional lenders, bypassing traditional financial intermediaries like banks. It enables borrowers to obtain loans and investors to earn returns by funding those loans through an online marketplace. These platforms use algorithms to assess credit risk, set interest rates, and facilitate transactions.
Developers should learn about P2P lending when building fintech applications, as it involves skills in secure payment processing, credit scoring algorithms, and regulatory compliance. It's used in scenarios like personal loans, small business financing, and investment platforms, requiring integration with APIs, data analytics, and user authentication systems. Understanding P2P lending helps in creating scalable, trust-based financial services that disrupt traditional banking models.