Image by Free-Photos from Pixabay

There are several things people think when considering investing in Peer to Peer Lending Platforms (in my humble opinion) and they go like this:

  1. What? Oh yeah that sounds great where do I sign?
  2. That sounds a bit risky – let me do some more research.
  3. I’m not sure I want to be associated with that.

Those of you that fall into Camps 1 or 2 will take the plunge at different times and enjoy the benefits.

For those in Camp 3 things are a little more complicated. It often comes down to how much they need or want the money as to whether they can offset this against their conscience.

It doesn’t need to be like that.

Are You In Denial?

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I don’t think anyone condones the level of interest some of these high street loans are able to extract from those that, if we’re honest, can’t go anywhere else to finance their needs.

So why should we invest in P2P lending platforms?

Why should we help to fund these enterprises?

Well again this depends on your point of view. Those in Camps 1 and 2 will no doubt get to the point of denial quicker than the others. 

By this I mean telling themselves:

‘I’m helping people to fund projects, that otherwise wouldn’t be able to get the finance’ or

‘Me not investing in this is not going to help them, and it is going to hurt me‘.

There is an element of both of these in all of us if we’re honest.

It doesn’t need to be like that.

Making An Impact

Throughout the globe there are many people that don’t even have access to the financial services they need to allow themselves to thrive, 1.7 Billion to be exact.

There is a company that is unlocking capital to help remove these barriers to success.

They are called KIVA, this is not an affiliate link – we gain nothing apart from peace of mind.

Their vision is a financially inclusive world where all people hold the power to improve their lives.

If you are struggling with the ethical aspects of funding the high interest loans available through peer to peer platforms, then consider this…

Through Kiva you can lend as little as $25 to help someone, less fortunate than you, realise their dreams. Investing in Kiva is a loan not a donation, so once it is repaid, you can lend it out again to continue the circle of funding.

Personally my plan is to invest 1% of my profit (once that reaches $25) into Kiva loans.

Building Relationships

Image by jason sackey from Pixabay

Kiva breaks down their loan projects into the fine detail. You can choose to invest in Women, Eco Projects, Livestock or Refugees to name just a few.

These can be further broken down into Single Parents, Conflict Zones or Water and Sanitation, the list is long.

They are very personal loans, you change lives and build relationships with the people you help.

For me this outweighs the risk and return aspect of this option.

Risk & Return

Unlike the P2P platforms, these loans are not covered by a buy back guarantee, so if the borrower defaults, you will lose your money.

There is also no interest paid.

In the UK, USA and Hong Kong you do get some tax benefits – check out the detail here – Shared Impact

But essentially your earnings are purely in the ‘feel good factor’.

It is all about balancing ethics. How it makes you feel and what you can afford to invest and potentially lose.

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