Peer to Peer lending in Nigeria and how it works

When it comes to borrowing, our minds often default to the options provided by financial institutions. However, there’s a less formal but equally impactful lending practice that many of us have participated in at some point – the “borrow scheme” or “can I see” scheme. It’s that moment when you ask a friend or family member for a small loan, promising to repay it promptly. This informal lending mirrors the concept of Peer-to-Peer (P2P) lending, which empowers individuals to obtain loans directly from other individuals, bypassing traditional financial intermediaries.


Types of P2P Lending

There are two major types of P2P lending:

  1. Peer-Funded for Individuals: This form of P2P loan is typically financed by regular individuals and peers. These individuals invest in credit financing and earn returns based on the interest charged on the loans.
  2. Group Peer-Funded: Different from individual-funded credit, group peer-funded loans are supported by a consortium of people, often high-net-worth individuals through hedge funds, bank endowment funds, etc. Large-scale investors fund these personal loans through P2P lending platforms. The distinguishing factor here is the substantial amount of money involved, compared to individual-funded loans.

How P2P Lending Operates in Nigeria

Although the concept of P2P lending is familiar, the organizations spearheading its progress in Nigeria are relatively new players. FINT, Farmcrowdy, and Kia Kia are at the forefront of driving this lending system. These entities collaborate with individuals who act as investors on the backend while packaging these loans for the recipients in need.

These organizations shoulder the responsibility of evaluating credit history and establishing specific criteria to safeguard the interests of these back-end investors.


P2P lenders typically process loans in two ways:

  1. Application Review Process: Your application is made available for a few days, allowing potential investors to review it. Investors then contribute to your loan based on your application. If your request reaches 100 percent funding or the listing time expires, you may choose to accept or decline the loan.
  2. Blind Investor Funding: In this funding model, P2P lenders approve your application and secure the necessary funds from a pool of blind investors. Here, investors don’t individually review your application, and you don’t have to wait for your loan to be funded.

Requirements for P2P Lending in Nigeria

While specific requirements may vary based on the P2P lending platform, here are some general prerequisites:

  • The borrower must be a salaried individual.
  • Must possess a valid national means of identification.
  • Bank account statement for the last six months (salary account).
  • Employment offer letter.
  • A recent utility bill (not older than three months).

Benefits of P2P Lending

The advantages of P2P lending include:

  • Access to lower interest rates.
  • Swift decision-making on loan applications.
  • Transparent transactions, including any fees imposed by the P2P platform.
  • Potentially more flexible terms compared to traditional loans.


The next time you’re in need of an instant loan, consider P2P lending as a viable option. With its lower interest rates, quick processing times, transparency, and flexibility, it might just be the solution you’re looking for. Embrace the evolving landscape of borrowing through Peer-to-Peer lending and experience a new level of financial empowerment.

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