Dubai-based Beehive officially launched the region’s first peer-to-peer (P2P) online lending platform today, offering a new funding alternative for small to medium sized enterprises (SMEs).
Pudner stated,“I’m very excited to be part of Beehive and as an alternative finance platform I think it will bring significant benefits to SMEs, investors and the region itself. Presently, a major stumbling block for businesses with growth aspirations is gaining access to credit, as banks generally reject between 50-70% of SME loan applications. SMEs represent 90% of total businesses in the UAE but account for just 4% of bank loans. Through Beehive, we have created an innovative online platform that directly connects investors and creditworthy businesses creating mutually beneficial partnerships for growth.”
Beehive’s online marketplace facilitates flexible funding for established businesses seeking investment between AED100,000 and AED500,000. Individual investors can invest from as little as AED100 and bid to lend money, choosing how much they will lend and at the interest rate. Beehive then facilitates the loan agreement between the business and investors, charging a small percentage fee of the loan amount. The business receives funding typically in around 7 days and investors receive monthly repayments at target rates of between 8% and 12%.
Founder and CEO of Beehive, Craig Moore stated, “Transparency is key to our offering. At Beehive, we are giving individual investors the opportunity to directly support regional SMEs, driving economic growth and employment. We are confident we have created a platform that offers a real alternative to the traditional debt markets and better value to both sides of the lending transaction.”
Peer-to-Peer lending, also known as marketplace lending, is estimated to be almost $9bn globally in 2014 and is forecast to deliver $1 trillion by 2025. It is an increasingly popular form of crowdfunding that is changing the way that SMEs borrow capital and the way in which investors manage risk and return.
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