P2P Lending and crowdfunding are two totally different concepts you say? True so far.
P2P Lending means the lender loans the borrower money. The amount is repaid together with interest.
Crowdfunding is usually applied to describe concepts were a crowd decides to finance project. The motivation there is to see the project getting done. The funds are not paid back but spent on the project and investors are sometimes rewarded with the art or products that are a result of the project. A good example for a crowdfunding platform is Kickstarter, which P2P-Banking.com covered earlier – see article: ‘Kickstarter – Pledge Money to Fund an Artist‘.
Moneyauction creates ‘Reward Funding’ – merges P2P Lending and Crowdfunding
Moneyauction, a leading p2p lending service in Korea, now announced their ‘reward funding’ option.Reward funding is still a loan, but at a lower than average interest rate. The rules for these reward-funding loans are:
1)Â Â Â Â Must offer lower interest than 5%
2)Â Â Â Â Must provide free tickets (rewards) for the item; minimum invest amount can be offered.
3)Â Â Â Â Must provide profit-share option to investors (after project is implemented and results are achieved).
Below is one of the reward-funding loans listed. The purpose is to finance a small movie.