As the concept of being the bank for another person via peer-to-peer microlending comes into its own we are noticing some developing trends in the deciding factors driving our investor base. In our previous post we reviewed a recent survey that was put forth to our community. We wondered -  What are the important pieces of information that influence an investment decision? So instead of wondering, we decided to ask.  Check out the interesting findings! So What IS important

Affinity For A Project.

As humans, we are drawn to things that we can connect with. Whether that means connecting with another person in a relationship or connecting with an object that we have affinity for.  Investors have shown the need to take a personal interest in a project before committing to a loan. It may be the architecture of the home or the type of project - for example a community rehabilitation. Regardless of the reason, a connection is usually made before a pledge is entered on a project.

Knowing The Neighborhood.

There are several reasons this is important. First, a local investment has appeal because it is a known entity to the investor. A project in a nearby neighborhood can be easily accessed by simply driving by and taking a look.  This provides confidence to the investor that the project is tangible and supports their number one purpose for lending: to make a return. The second reason knowledge of the area is important is because of a sense of community and doing good. Many investors see this as icing on the cake when a healthy return can be made AND a neighbor can be helped to reach their goals. It’s a win-win for everyone.

Making At Least 8% Return.

Of course no one at GROUNDFLOOR was surprised by this one! Providing a return is the whole point in microfinancing. The mission and the circle of investor lending and repayment is what the business cycles around.

Just Plain Curiosity.

Some folks are simply curious about the industry and the opportunity and they are willing to give it a try. Understandably, some investors start small to build confidence before working their way up to larger commitments and multiple projects. And for someone new to the concept of microlending that makes a lot of sense.

Consistent and Persistent Returns.

Volatility in the market can be exciting and it may be important for some investors to have high-risk investments in their portfolio.  Our lenders have chosen to participate in peer-to peer, debt-based microlending because of the consistent flow of returns and the security of debt investing.  The majority of our investors tell us that they will roll over into another project once their current loan is repaid. That’s a true testament to the confidence in peer to peer lending!

Low Investment Minimum.

Investors appreciate the idea of getting in on a secured loan at a low level of  commitment.  With GROUNDFLOOR we afford the ability to participate in an offering with as little as $100.

Peer to peer microlending has gotten it’s fair share of attention over the last year and as the industry grows and evolves it will be exciting to watch what the future will bring!

Tell us what you think!  How did you decide to get involved in peer-to-peer microlending?  Did you have hesitations? Where do you think the industry is headed? Source:  GROUNDFLOOR Investor Survey, 2014