In April 2018, the Marias Bank regulated the operation of credit fintechs and introduced a new type of peer-to-peer or P2P lending in Brazil. In it is possible to take the money directly with another person, who is interested in earning interest on the loan. The condition is that there is a company registered as a SEP to broker the operation.
The sport emerged in England in 2005 and spread worldwide after the 2008 economic crisis. Today the United States is the largest P2P market in the world.
How Peer-to-Peer Loan Works
Each company adopts criteria for selecting who can borrow peer-to-peer, whether individual or corporate. In general, the better the lender’s rating, the lower the interest rate and investor return.
Therefore, for those who want to invest, the higher the profit, the greater the risk.
There are companies where the borrower himself sets the interest rate, knowing that he is more likely to receive the money if he agrees to pay more for the loan. In others, SEP sets the rate according to a credit analysis.
There is also the possibility of investing in a fund that will lend to one or more legal entities. In general, the risks of default are lower when lending to companies.
One tip is to diversify investments, because even if there is a default on one borrower, the profit from others covers the loss.
Therefore, borrower and investor should research SEP and carefully review the process to find one that they feel most comfortable with.
In addition to the interest rate, which is the investor’s profit, the borrower must pay the commission charged by SEP and the Financial Transactions Tax (IOF). The sum of these factors results in the Total Effective Cost (CET) of the loan. But attention, it is forbidden to ask for advance to realize the credit, this is a crime. These values must be diluted in the installments.
It’s not loan sharking
Despite being a loan between people, the practice is quite different from loan sharking, which is illegal and dangerous. A financial institution continues to broker the business and the client is protected by all laws, and can report the institution to the Marias Bank or Procons if something happens.
Another difference is that the peer-to-peer loan interest rate is usually low, while loan sharks lend with extremely abusive interest.
Does Fundico Brasil make a peer-to-peer loan?
No, in Brazil Fundico only makes personal loans to individuals, but it is one of the main P2P platforms in Europe.
Fundico started in 2013 in Germany with the proposal to make peer-to-peer loan. Today it is also present in Austria and the Netherlands. In 2015 we arrived in Brazil.