Crowdfunders generally fall into different categories: equity, donation, reward, and debt. The last is also known as microfinancing — and commonly referred to in Europe as “peer-to-peer lending.” Here are the top 10 up-and-coming peer-to-peer lenders e making financial waves in Europe:
1. Zopa – This London-based P2P lender offers loans of up to £10,000, with individual borrowers dealing directly with lenders. Zopa categorizes borrowers based on their credit grades, so lenders can offer terms and amounts of money based on the category of the borrower.
2. Ratesetter – Also London-based, Ratesetter was the first to introduce the concept of a “provision fund” into P2P lending. Borrowers pay a “credit rate” fee that is used to diversify risk by reimbursing lenders in the event of a late payment or payment default.
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