For about two years now we’ve been reading and researching about peer to peer lending in preparation of our business, boroboro.
I personally have had the idea of creating an online bank for a very long time. Actually we would have started it before I even started YOUNG TREPS five years ago but the dynamics of the financial industry aren’t easy. The financial industry is one of the most risky and regulated industries in the world hence the need to be fully prepared if your to get into it.So early this year after accumulating as much information and knowledge we decided to start and learn the rest along the way. Atleast the basics have been covered. The team is building the app fast and hopefully by end of july (latest) the app and website should be up and running.The legal oparational paper is being put together too.That said what will boroboro do!? Boroboro is going to be an online bank when it’s fully oparational. However this is going to be taken step by step starting with the credit element of the business. One of the things banks/financial institutions do is offer credit and we think thats our low hanging fruit. We hope to build on that then slowly move to other services as we thrive meet to the minimal legal required requirements to do so at every stage.We shall move to taking deposits in the future too..
For now (next 2-3 years) lets focus on the credit part of the business. Credit or lending like most of us understand it is one of the various services of the financial service industry/sector. Lending money however has to be done legally. It’s illegal to lend money with the aim of profiteering if you are not legally allowed to do so. It’s also very risky.
Some people have benefited from the ignorance of those who dont know and others have bled dry at the hands of some bold and shrewd fellows.
Money as a commodity is the most sought after commodity, but it’s also the most risky commodity to trade in. The most vital part of lending is recovery. Before you lend money you need to figure out how to make sure the chances of recovering that money are the highest they can be even when legal force is required to do so which are both hectic and cumbersome.
This makes lending money illegally a very risk thing because once people fail to pay then you have to use unorthodox means to compel them to. You don’t want to put yourself in a position where you have to act like some mafia or gang boss to have people pay haha. It comes with very heavy consequences as things could go terribly wrong.
That said, we are exploring the possibility of having every one lend money if they so wish without exposing themselves to the risk of losing money through a peer to peer arrangement. Through our platform you’ll be able to see vetted borrowers whom you can chose to lend money and make money off while we carry the risk on your behalf. You don’t need to be a money lender yourself to do this. You don’t have to carry the burden and risk that comes with lending money because we shall carry that cross for you.
However peer to peer lending will account for only 20% of our lending in the begining as we experiment with what has never been done before here. 80% of the lending will be inhouse and maybe with time we can slowly keep increasing that window to allow more people to benefit from it.
Just like it’s name, peer to peer (friend to friend), it’s about lending money to each other and making a profit off it without necessarily having to have the legal paper work required to legally lend money. Remember friendly loans are not supposed to legally come at an interest but here through us we shall make it possible for you to do so. Most importantly, it’s totally risk free for you…
Jaluum Herberts Luwizza is a Speaker,Writer, Columnist with the C.E.O Magazine and Contributor with the Nile Post.He is also a Business Consultant with YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.twitter:jaluwizza
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