What does ethical loan mean? In short, do not feed a high-risk circuit for many and high-gain for a few.
Then contracting the applicants with sustainable debts and protecting the money lenders.
Ethics is a beacon and a business model. To respond to the many requests from the forums, we can begin to say that lending money in an ethical way does not mean giving it to everyone or those who need it most, especially if it does not have a credit history that allows it to be evaluated or a past of a bad creditor.
This for reasons, in fact, “ethical”:
We all remember the subprime mortgage crisis, the one that has ignited the fuse of the economic crisis and the global recession from the US? The mechanism was this: creditors were granted loans on previous loans, thus turning it into a mountain of high-risk debt that was then “hidden” in complicated packages to be resold to banks with very large profit margins: Result? Bankruptcies, lost jobs, families without money and home. Lending money in an ethical manner therefore means transparency and avoiding such trap mechanisms. That’s how.
1) Ethics for therefore means not allowing people to get into too much debt, but above all to make consumption credit as it once was, when the mathematicians had not yet developed complex financial products. Each euro placed on the platform corresponds to a euro loan, without alternative steps.
3) Ethics also means protecting the creditor, who must be sure of his investment. It is he who chooses which interest to apply to the money he lends, but the task of the platform is to bring together supply and demand, choosing the closest and most appropriate interest to those who request the loan instead.
4) The ethical loan, we said at the beginning, can not aim to pump the profits of a few. In fact, does not earn at all on the interest charged on the loan, which is an exclusive of the lender. In , only one commission is responsible for the agreement between the parties. This fee is 1 percent charged to the lender and between 0.9 percent and 3 percent to the creditor, depending on his risk profile and the amount of his loan.
5) The profit of the lender is very often reinvested on the platform, going to feed more consumer credit and thus turning the economy.
The ethical management of is therefore concretized in an ethical purpose: money that circulates, consumption that grows, growth of a healthy and sustainable economy.