Loans with Funding Sources - P2P Lending
  • 26 Aug 2022
  • 2 Minutes To Read
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Loans with Funding Sources - P2P Lending

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Article summary

Warning!

As of March 15, 2022, Mambu no longer offers the peer-to-peer (P2P) lending feature (also known as loan fractionalization). 

Existing customers already using the P2P lending feature, will continue having access to it. However, any new enhancements or changes of this feature have ceased. 

If you have any questions, please contact us through Mambu Support.

Peer to peer lending differs from traditional lending on how the loans are funded. While in traditional lending it's the financial institution that funds the loans, with peer to peer lending the funds come from investors. Investors and borrowers (either individuals or SMEs) are connected via online platforms that serve as intermediaries usually for a disbursement fee and a spread on the interest rate.

Mambu manages the loan fractionalisation by doing transfers from deposit accounts (investors' accounts) to the loan accounts at disbursement and refunding the deposit accounts as the repayments are made.

For more information, go to Funding Sources - P2P Lending.

Setting up Organisation and Funder Commissions

In order for a loan to allow funding on a loan product, when creating or editing the product, go to Funding Source section and simply enable Funding on the product. You will see several fields available which will allow you to set up your organisation commission as well as the funder commission.

Organisation Interest Commission

In this section you can set up your organisation commission default, minimum, and maximum values for the organisation interest. This is the interest that will be gained by the organisation with each repayment on the loan. The values set on the product will be validated when creating a new funded loan account.

Funder Interest Commission

When setting up the funder interest commission, you can choose between two different allocation methods.

  1. Percentage of loan funding: the interest commission is allocated based on the percentage of the investment made (for example, if the funder invested only in 40% of the loan).
  2. Fixed Interest Commissions: the interest commission paid back to customers is applied based on the values inputed here. If they are left empty, the interest commission can be defined upon account creation and further customised for each funder.

Locking funds on funding accounts

When enabling Funding Sources on a loan, you can also choose to Lock Funds on Funding Account at Approval, a very useful setting as it prevents funders to over-commit to multiple loans. When funds are locked, Mambu will not allow withdrawal on that amount, from the funding deposit account, and funds will be displayed as locked on the account.


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