…that, according to Microfinance Focus, there exist 13 online Marketplaces that enables you to lend to entrepreneurs across the globe*. Quite a number I would say… and interesting to see the uniqueness of some of the platforms.
When Mads and I drew the first line of the MYC4 concept, there were no other players! No, not even Kiva, who you would think has been here forever; almost being an institution in this field. So there was no roadmap as to, how we should take the first steps (Pssst, it should be no secret that this is a major driver for us!).
P2P (Peer to Peer) is definitely an important vehicle as to getting the financial structures in place in the developing countries. With 80% unbanked in Africa, something new must happen in order to break the curve. I am not saying that P2P is the only path to follow – no, I think what is needed is the opposite of a ‘one size fits all’ mentality. Yes, aid is still very much needed, but it should not ‘interfere’ with business in general – we should all stick to our knitting!
There is no doubt that the entry barriers to this space is lowered significantly, I mean, just being able to spot what others, like us, do wrong or what could be done in a more efficient way, has to some extent created the ‘roadmap’ we lacked, hence why we see +13 platforms operating today. We believe that there is room for several players (as long as there is poverty, there is nothing called competition), which is why we have been open about our mistakes and key learnings. If there are two things I want to highlight today for new comers then it would be:
- Setting up a P2P Marketplace contains a substantial number of moving parts
- The true value is not created online but offline; on ground day-to-day interaction with all the borrowers/entrepreneurs
So what will the future bring on this front? Well, I hope to see a financial strong player step in as a shareholder (ownership creates a long term commitment) and ‘gear’ an existing set up in order to scale it to new heights – with the impact and learning to follow! The hand shake lies in the following combination (a bit oversimplified):
- The existing P2P Marketplaces can only scale to a certain point – it takes real ‘muscles’ to make substantial impact
- The global financial players can piggy back on existing set-ups (digital platform, learning, team, mistakes, Partners/outreach, innovations, etc.) and develop from there into their strict systems
Do you know of any P2P Marketplaces that is not mentioned here, please let me know and I will check them out. If you want to give your ‘2 cents’ on the future of P2P, be my guest…
*) Actually, as you can see in the comments of the post I link to, there are a couple of players more out there…