RainFin, a new South African financial services company, is planning to “shake up South Africa’s banking market by bringing social lending and borrowing to South Africans.”
The group will target a launch for 3 July, describing itself as an online money marketplace that facilitates peer-to-peer lending.
Peer-to-peer lending, also known as person-to-person lending or social lending, is a type of financial transaction which occurs directly between individuals or “peers” without the intermediation of a traditional financial institution.
Person-to-person lending is for the most part a for-profit activity; this distinguishes it from person-to-person charities, person-to-person philanthropy and crowdfunding, which also create connections between donors and recipients of donations but are non-profit movements.
UK peer-to-peer site, Zopa, which started in 2005, has already lent more than £210 million. Zopa charges borrowers a borrowing fee on approval and lenders a 1% annual lender fee on the amount they lend.
It is unclear how RainFin aims to make its money, or how much it will charge borrowers or lenders, but CEO, Seam Emery, an angel investor and general partner (GP), is set to underline the group’s business model in more detail in early July.
Article by Gareth Vorster on BusinessTech