10 Questions
What does peer-to-peer lending involve?
Matching borrowers and lenders in a central marketplace
What determines how much the borrower will need to pay in interest in peer-to-peer lending?
Risk classification
What has been a key factor contributing to the rapid growth of peer-to-peer lending?
Better interest rates offered than traditional banks
How is peer-to-peer lending perceived compared to traditional banking?
Having better social value and being more responsible
What is the main source of revenue for peer-to-peer lending platforms?
Charging fees when new loans are taken out
Why are peer-to-peer lending platforms heavily affected when there is no appetite for lending and risk in the market?
Their performance is reflected in their revenues and company valuation
Why have the top lenders in the UK, Zopa and Funding Circle, struggled to make a profit?
High origination and servicing expenses
What does it mean when some lenders spread their investment over many different loans?
They reduce the risk by diversifying their investments
What would be a path to stability for P2P lending platforms according to the text?
Offering other bank services in addition to P2P lending
Why are provision funds set up by some P2P lending platforms?
To cover potential default on loans
Explore the concept of peer-to-peer interactions and their applications in computer networking and finance. Learn about peer-to-peer file sharing, lending, and marketplace interactions.
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