00:21.600 --> 00:23.850 Vlad Sherbatov: What is peer to peer lending? 00:24.170 --> 00:26.240 Marc Caya: Do you know where where banks get the money from 00:26.240 --> 00:29.450 when they issue loans? So they actually use customer's 00:29.450 --> 00:31.610 deposits. So the money that you have in the bank account, 00:31.700 --> 00:34.310 they'll use this, and they'll lend it out keeping the profit 00:34.310 --> 00:37.790 for themselves. So what and we've been operating like this 00:37.790 --> 00:41.720 for literally hundreds of years, the model has never changed. So 00:41.720 --> 00:45.560 what peer to peer lending is, is that we're modernizing that old 00:45.560 --> 00:49.940 structure. And we're connecting borrowers directly with lenders, 00:50.180 --> 00:53.750 so that instead of having the banks keeping the profits for 00:53.750 --> 00:57.980 themselves, we connect borrowers and lenders and indirectly so 00:57.980 --> 01:00.470 they're, we're removing the banking intermediary. 01:00.830 --> 01:02.360 Vlad Sherbatov: And there are two sides of it, there is 01:02.390 --> 01:07.190 borrowers and our investors, how do they interact with each other 01:07.190 --> 01:08.030 and with the platform. 01:08.270 --> 01:10.850 Marc Caya: As a borrower, you would go online and go here, 01:11.360 --> 01:15.590 sign up for a loan similar, similar to what you would do for 01:15.590 --> 01:18.980 an online loan applications, it takes about five minutes and 01:18.980 --> 01:22.190 you'll get you'll get approved, or no, you'll get an answer 01:22.190 --> 01:27.170 within a few hours of your, of your applications. If the loan 01:27.170 --> 01:31.010 is approved, it gets listed on the go peer platform, where 01:31.010 --> 01:34.100 investors can browse through the available loans and select how 01:34.100 --> 01:37.460 much they want to invest into each of the loans. And then when 01:37.460 --> 01:40.280 a loan is completely funded, when it has gathered enough 01:40.370 --> 01:44.390 investments from investors, the loan proceeds are dispersed to 01:44.390 --> 01:45.080 the borrower. 01:49.820 --> 01:51.830 Vlad Sherbatov: Most people are familiar with mutual funds or 01:51.830 --> 01:57.740 stocks, or GICs, for example, how is investing in the goal in 01:57.740 --> 02:00.560 goal peer and peer to peer lending in general different 02:00.560 --> 02:03.530 from investing in those conventional types of forms? 02:05.040 --> 02:07.950 Marc Caya: Well, I think it's both it's both similar and 02:07.950 --> 02:13.230 different at the same time. So investing into peer I think is a 02:13.230 --> 02:16.620 peer to peer loans is a great way to diversify your portfolio. 02:16.620 --> 02:19.020 So I wouldn't invest all the money I have in peer to peer 02:19.020 --> 02:23.010 loan, but rather say five to 10% of the portfolio of investment 02:23.550 --> 02:26.790 could very well benefit from peer to peer loans. Mostly 02:26.790 --> 02:29.640 because it's the returns are uncorrelated with most other 02:29.640 --> 02:33.780 asset class that you mentioned, like stock, it's a fixed income 02:33.780 --> 02:38.370 note. So there's no fluctuation, like a stock price can go up and 02:38.370 --> 02:43.440 down. Usually the returns on on fixed income loans like like 02:43.470 --> 02:50.070 peer to peer loans will be a lot more steady, passive income. One 02:50.070 --> 02:53.700 of the key aspects though, is that if you invest in a three 02:53.700 --> 02:56.940 year term loan or a five year term loan, you need to be able 02:56.940 --> 03:00.930 to hold your investment for the duration of the term. So unlike 03:00.960 --> 03:04.380 stocks, you cannot sell it the same day. With peer to peer 03:04.380 --> 03:08.220 loans, you'll receive repayments on a monthly basis of capital 03:08.250 --> 03:11.370 and interest over every month, you'll receive a little bit of 03:11.370 --> 03:14.100 your investment, but you cannot sell it out if you need the 03:14.100 --> 03:18.180 money, say tomorrow. So you'll need to you need to be able to 03:18.180 --> 03:19.890 hold it for the term of the loan. 03:24.540 --> 03:27.242 Vlad Sherbatov: Let's talk about the industry that you're in 03:27.303 --> 03:31.111 right, peer to peer lending. I mean, how big is this industry, 03:31.172 --> 03:35.164 is it? You know, where is Canada right now among maybe some other 03:35.225 --> 03:38.234 international peers when it comes to this type of 03:38.296 --> 03:42.042 experience, both for borrowers and for lenders? Can you share 03:42.103 --> 03:45.420 some of the industry insights from your point of view? 03:45.899 --> 03:49.440 Marc Caya: Yeah, definitely. So the industry is brand new in 03:49.512 --> 03:53.920 Canada, actually were the first consumer focused peer to peer 03:53.993 --> 03:58.473 lending company that's available to everyday Canadians and not 03:58.545 --> 04:02.592 just accredited investors. However, it's been around for 04:02.665 --> 04:06.928 over 15 years in the United States, the United Kingdom. And 04:07.001 --> 04:10.470 it's it's really big, particularly in the United 04:10.542 --> 04:15.167 States where I think it's almost 30% now of all loans originated 04:15.239 --> 04:19.070 in the US originated online through fintech startups. 04:19.579 --> 04:21.942 Vlad Sherbatov: Don't forget to subscribe to the Smarter Loans 04:21.993 --> 04:25.230 YouTube channel for more videos that will help you make smarter 04:25.282 --> 04:26.310 financial decisions.