You’re not alone in feeling anxious about your finances. According to a survey from Nanos Research in November 2022, nearly half of Canadians reported that their personal financial situation has become worse over the last year.
For many, this is due to the skyrocketing cost of gas, increased grocery prices, market instability, and multiple interest rate hikes, which all make it difficult to save money or plan for the future.
For around 8 million Canadians, accessing credit cards is the most affordable option for financing. Marc-Antoine Caya, co-founder and CEO of goPeer, believes this isn’t right. This is why peer-to-peer lending has recently gained traction in Canada, thanks to the exemption of market dealer registration by security regulators. This is one of the newer financial and investment avenues Canadians are turning to in order to manage their finances better – the process works by connecting people who want to borrow or lend money.
Those needing a loan can go to the goPeer website, answer a few simple questions, securely share their credit and banking information, and easily take out a loan. The company has developed technology to assess credit risk and determine how to appropriately price the loan for both borrowers and lenders.
For those who want to lend their money, goPeer offers more than just the satisfaction of helping out fellow Canadians. It provides an opportunity to diversify their portfolio by investing in consumer credit, which they can expect to yield returns of 10% annualized on average.
A couple in their 30s or 40s with a combined income of $200,000 may already have traditional investment and retirement portfolios, but they may be looking for a passive way to generate additional income. By lending through goPeer, they can do so while helping others.
“What’s really appealing is that we have no minimum for investors. As a lender, you can invest $10 per loan. We’ve made it low so that everyday Canadians with $1,000 to invest, can loan to 100 different people”, said Caya. “What we’re seeing is that for every 100 loans, you can expect a few to default – that’s a normal part of the process – but by investing small amounts across many loans, lenders can de-risk themselves to maximize returns. Of course, while higher-risk loans do come with higher returns, we follow a strict process to manage defaults.”
According to Caya, lenders who use the goPeer platform have the ability to take advantage of the convenient automated investing feature. This allows them to make investments based on the criteria they have established, and will help their money to grow over time without having to log in regularly and determine where to lend. In addition, it has the benefit of assisting those in need.
Joseph Buaron, co-founder and chief technical officer of goPeer, explains that their company stands out from other lenders due to their lack of incentive to charge borrowers more, or have hidden fees and early repayment costs. Instead, they make their money through a transparent fee-for-service system. Buaron added, “Our model puts us in a better position to look out for everyone’s best interests. You’re helping your community and everyday Canadians get out of debt faster, while circulating that money back into the economy.”
Caya, as well, noted that “inflation is high right now, but goPeer returns can be higher, so it’s a buffer against inflation. The platform is very innovative and levels the playing field for average investors who never had access to this kind of asset class.”
He believes that goPeer’s greatest contribution is the ability to help people – both borrowers and lenders – to improve their financial health. “Those values are very important for us,” Caya said. “We’ve built the platform for everyday Canadians and have over 55,000 members.”