A peer-to-peer (P2P) economy is a platform where two individuals interact to buy or sell goods and services directly with each other.
The sharing economy involves short-term peer-to-peer transactions to share the use of assets (money, spare rooms, cars) and services or to facilitate collaboration.
The peer-to-peer economy has grown exponentially over the last 5 years largely thanks to the internet.
We now have direct access to people with spare cash (lenders) without having to go through banks and their unreasonably high-interest rates.
For this type of exchange of goods/services to happen, the sharing economy needs some type of online platform that connects buyers and sellers (which is what Leap is for).
Leap Lending is a platform that connects buyers (those who want to borrow money) and sellers (those who want to lend money).
We allow individuals to lend money to one another at better rates than those offered through traditional banks.
Leap is more affordable and ethical than banks.
What Does Ethical Lending Mean?
P2P platforms like Leap allow lenders to make money from their spare cash by helping those in a financial struggle.
Essentially lenders make money by helping borrowers get out debt.
If you’re a lender you will still earn high-interest rates to invest. The reason we can offer lower rates for borrowers is because we are an entirely online platform with minimal overheads.
So, rather than paying for branches, 100+ employees and other unnecessary costs, we’re able to pass the savings on to our borrowers.
At Leap, we make use of internet technology to help people become financially happier.
It’s easy to forget that your investment could have a consequence or an impact on society and people.
Beyond competitive rates, the peer-to-peer sharing economy can be a transparent way to invest, allowing you to see exactly where your money is going.
Choosing a peer-to-peer platform over a traditional type of investment could see your money go towards building small and independent businesses, buying someone a new extension for their property and - perhaps most importantly - helping your peers work towards financial freedom.
What Is Ethical Banking?
Ethical banking is a broad term which allows a financial institution to lean into a social cause.
Traditional banks have been profiting off people’s financially misery far too long.
Banks often offer overdrafts and credit cards without any form of affordability checks in place. Overdrafts are extended without even asking you and deceptive loans are arranged to keep customers in debt, rather than help them get out of it.
Ultimately this is because banks are cashing in on these charges, penalty fees, and overdue payments.
At Leap, we want to change that. For us, ethical banking means that your money will be invested in contributing to other’s financial wellbeing rather than keeping them in debt.
We want to use the P2P sharing economy to build a community where everyone can thrive and feel financially secure.
When you invest in ethical banking you are ensuring that your money will be invested in ways that are socially, morally and ethically positive.
Why Do We Care About Fairer Lending?
Leap has been built with a shared vision to combat payday and short-term personal loans.
Everyone who has played a role in the design and development of the company believes that everyone deserves access to the tools and knowledge required to improve their own financial wellbeing.
Our goal is to build a community where borrowers and lenders can strive to achieve their individual financial goals with the aid of the peer-to-peer sharing economy. Rather than rely on quick-fixes with poor interest rates.
At Leap, we have partnered with AccountScore to introduce Open Banking to our credit model.
Using their technology, we can thoroughly assess the affordability of every individual customer, allowing us to make fundamentally fairer decisions as to whether a peer-to peer-loan is going to improve a customer’s financial wellbeing, rather than be a detriment to their quality of life.
The Role of P2P Lending in Sharing Economy: Key Takeaways
We hope you enjoyed learning about P2P economy and if there are only 3 things to take away, we hope they are the these:
1. The role of P2P lending is to facilitate fairer transactions for buyers and sellers without exploiting any parties. Leap is here to get your out of debt, not to keep you in debt.
2. Ethical lending allows people to profit while helping those in a financial struggle.
3. Ethical banking allows financial institutions to invest in socially, morally and ethically positive causes.
Are you looking for better ways to invest while still making good returns? Click the button below to see the returns you could earn when lending with Leap.