Peer-to-peer lending has existed for thousands of years. If you have ever loaned money to a friend, then you have participated in it. But it is only in the last few years that it has moved beyond just the exchange of money between friends and family. Today, peer-to-peer lending is becoming a big new industry that is independent of the traditional financial system.
Many investors are enjoying excellent returns. As this recent article in Forbes pointed out, 10 percent returns are not uncommon. What this has meant is that larger investors are becoming attracted to peer-to-peer lending and it is becoming a real asset class in its own right. Some financial advisors are recommending peer-to-peer lending to their clients, and institutional investors such as hedge funds and pension funds are now getting involved. New individual investors continue to flock to the platforms, as well, lured by the returns on offer.