South Korea’s peer-to-peer financing startup Lendit said Thursday that it plans to allow investors and borrowers to trade notes that are not mature by establishing an online secondary market.
Lendit CEO Kim Sung-joon (Lendit)
P2P financing refers to a loan crowdsourced from investors seeking midrange interest rates, between 5 and 10 percent per year. The interest comes from borrowers’ debt servicing. Korea is home to 175 P2P financing platforms licensed as of end-August.
The new system, dubbed the “Lendit Market,” will start operation by the first quarter of 2019, Lendit said, but details have yet to materialize.
The adoption of what is equivalent to the US P2P financing platform Lending Club’s secondary market, FolioFN, will enable the higher liquidity of Lendit’s platform, the startup said in a release. Currently, investors in the Lendit platform cannot retrieve any of the principal of their investments or any interest earned until the notes from borrowers reach their maturity date.
By Son Ji-hyoung