Peer-to-peer lending platforms and stakeholders have debunked some common myths consumers have about P2P, such as that it is a non-regulated sector closed to retail lenders.
Speaking at the P2P Investing Summit on Thursday, a virtual event hosted by Peer2Peer Finance News and AngelNews, Stephen Moss, founder and managing director of Sourced Capital, said many people believe P2P is one product.
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“There are lots of different types of P2P products and sectors in the industry,” he said.
“People just see P2P as one product, one solution, but ultimately it’s not, it’s broken down into different sectors, structures and platforms with lots of different exciting things.
“That’s one of the frustrations what I find quite often when you speak to people about P2P, that it’s just this one whole sector and everyone does this same type of thing, so it’s educating people there are lots of different ways to look at P2P.”
Rishi Zaveri, chief executive of Lendwise, said one common misconception about P2P is that it is not regulated.
“Platforms will tell you the opposite,” he said.
“We have been regulated by the FCA, we spent nine months getting the authorisation. P2P is a regulated, sensible, viable product that should form part of an overall portfolio.”
Jeffrey Mushens, technical policy director at The Investing and Saving Alliance, said the myth about the sector that bothers him the most is that P2P isn’t for everyday investors.
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“At its roots P2P is about enabling ordinary folk to diversify their lending and have a diverse range of borrowers to lend to,” he said.
“I think P2P democratises savings and gives ordinary folks access to it. I hate the idea that good investment opportunities are only for the rich.”