Confessions of a Peer to Peer Lender

Livio Montesarchio, Marketing Specialist, BorsadelCredito.it | May 11th, 2016

Or innovation explained over a coffee

On the other side of the phone Alessio is listening carefully while I tell him that he might have found the solution he was looking for. He asks questions, replies “seems fair,” “fine,” “it’s what I was looking for,” to all that I explain. His reaction is not very different from that of Rosaria from Naples, Alessandro from Rome, or dozens of other people who contact us every day to understand how-this-peer-to-peer-lending-works.

At one point Alessio goes silent. Two, three seconds, not more, but it is clear that a doubt has crept into our conversation. I wait for him to shoot the ball. I have just emphasized that a company that asks for loans on our platform gets a full and thorough feasibility study in less than 24 hours. And if everything is ok, money is on their account in 3 days. What else could an entrepreneur wish for? This is what I think and say every time since, nearly eight months ago, I started looking for companies that need funding.

Something changes in the voice of Alessio, he shifts tone and says, “This speedy timing… is quite scary, isn’t it?” I see the ball roll in a different direction than I expected. We’ll have to roll up our sleeves.

The world has changed
An Italian P2P lending platform like ours faces a number of very delicate challenges when trying to reach its expected target: that is, to become a landmark in the world of business loans. One of the hardest – and therefore most exciting – challenges is to set a new pace and new ways of communicating within an industry where all players have well-established habits.

Consider Alessio: he has been working with many enterprises for years, he is used to assist companies that seek loans and knows their strengths and weaknesses. He is a precise professional: he collects the documents, organises meetings and even personally accompanies entrepreneurs to the banks. He guides them through every stage of the application, knows how long it takes to have a reply and how to tell entrepreneurs to be patient. He is prepared to handle both positive and negative outcomes. In any case, he will not be discouraged: there are always other doors to knock at and more weeks to wait.

I wait a few seconds too: while I speak of the opportunities of P2P Lending, I realize I am basically telling Alessio that the world has changed. We no longer need to wait months or weeks for an answer, he can start saving on printer paper and ink, if he wants, he can work from his tablet – he just needs an Internet connection. Alessio understands that a revolution has come knocking at his door: how would you feel if you were him?

Digital tools, but same old purpose
While the vast majority of the Italian population has access to the Internet (in 2015, over 86% has browsed the web at least once), just 40% of them use it every day. This means that for more than half of the population the Internet is not essential: it is not a primary source of information regarding work, education, etc. (Audiweb data).

Lending to businesses through a digital P2P Lending platform makes life easier for everyone. However, to change the way in which people or companies think about loans is not so easy. In order to convince ourselves that technology doesn’t “steal” our lives from us, rather, it simplifies it, we need time to understand and interpret change; especially, we need to personally experience the benefits it carries.

The very fact that there is a platform that allows you to avoid a tortuous, expensive and non-transparent evaluation process – i.e., the one to which most people have become accustomed – will not change the way an accountant or consultant interacts with an entrepreneur. Indeed, it must not! Eye contact, handshakes, writing a loan application together: all of this won’t change between Alessio and his clients. Interpersonal interaction, in fact, is essential to the life of a peer to peer lending platform, and we promote it in every way.

What changes is the means by which I reach my objective: isn’t it more convenient to apply for loans directly on my tablet (estimated time: ten minutes) rather than spend half a day at the bank? Why should I wait two months to know whether or not I can get a loan, while I can have the same information in a day, for free? Or why should I buy bank shares or find a guarantor? Isn’t it more correct to evaluate the business project instead? And so on.

Building trust with a creative approach
These are the themes of which I speak every day with entrepreneurs, consultants, agents, accountants. Some people throw themselves enthusiastically in this new opportunity, others need more time to be convinced that all the beautiful things I tell them are true. Actually, very few of them don’t get curious.

We believe that if we want to convince entrepreneurs that our way is the right way, we have to build a relationship based on trust, which we cannot do if we set boundaries and are too formal. Both parties have to work side by side: on the phone, Skype, over coffee or lunch. In this sense, then, technology does not replace experience, but makes it easier. The road to the success of P2P Lending needs this kind of approach, as well as companies’ creative ability to breach through the hearts of those who run Italy’s loan industry.

So, I’ll call Alessio tomorrow, I’ll take my tablet with me and ask him to meet over coffee: I’ll show him that that the time for a break is just enough to fill an application form from start to finish. And I think he won’t be scared.