A new peer-to-peer (P2P) lending platform called Loanio has launched in the US which is aimed at customers with poor credit records, such as sub-prime borrowers.
Borrowers with poor or no credit scores will be allowed to participate on the p2p lending platform by using a co-Borrower or guarantors, says Loanio.
"Only around 10% of borrowers on P2P sites wind up getting a loan. Many of them have less than stellar credit profiles. With options for these borrowers drying up elsewhere, we believe this feature and others on the website will fill a sorely needed void in the P2P lending arena," says Loanio CEO and founder Michael Solomon.
Loanio says it will also enable lenders to obtain more reliable data on borrowers through a "platinum verification service". The service means borrowers can opt to have their financial profiles checked by the site, so lenders don't have to rely on self reported data.
By having details such as filed tax returns, employment and income verified, borrowers increase their chances of attracting a loan, says Loanio.
"We want to provide as much data to our lenders as possible and the verification of these items allow borrowers to tell lenders they are serious about this process," adds Solomon.
People with good credit records can also use a co-borrower to improve their chances of attracting a lender.
Earlier this year, consultancy Gartner published research predicting that social banking platforms - such as peer-to-peer (P2P) lending networks like Zopa and Prosper - will grow to control 10% of the worldwide market for retail lending and financial planning by 2010.