RainFin, a new South African financial services company, is planning to \u201cshake up South Africa\u2019s banking market by\u00a0bringing\u00a0social lending and borrowing to South Africans.\u201d<\/p>\n
The group will target a launch for 3 July, describing itself as an online money marketplace that facilitates peer-to-peer lending.<\/p>\n
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.<\/p>\n
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.<\/p>\n
UK peer-to-peer site, Zopa, which started in 2005, has already\u00a0lent more than \u00a3210 million.\u00a0Zopa charges borrowers a borrowing fee on approval and lenders a 1% annual lender fee on the amount they lend.<\/p>\n
The company provides an online quote on the\u00a0annual percentage rate\u00a0(APR), which is dependent on the amount a customer aims to borrow and the lender.\u00a0Zopa says that over the last 12 months lenders have lent their money out at an average rate of 5.6%.<\/p>\n
The company set up a Twitter account and posted its only tweet in May, while RainFin\u00a0joined Facebook \u00a0on 25 November 2011, under the moniker: \u201cRainfin is the platform. We facilitate; collect; contract and legalise peer-2-peer lending!”<\/p>\n
It is unclear how RainFin aims plans to make its money, or how much it will charge borrowers or lenders, but\u00a0CEO, Seam Emery, an angel investor and general partner (GP), is set to underline the group\u2019s business model in more detail in early July.<\/p>\n
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