Economic downturn effects on P2P market: Pros & Cons

During last year peer-to-peer lending platforms have felt pressure on the businesses. COVID-19 pandemic caused financial turmoil – the first major challenge to all P2P platforms in a while. At the beginning of the pandemic, many people started requesting withdrawals, which led to P2P platforms taking action to ensure the protection of every investor.

According to the research published in the Journal of Finance, hospitalization rates are linked to daily stock market variations. A big drop in the stock market has “an almost immediate impact on the physical health of investors, with sharp declines increasing hospitalization rates over the next two days”. It's nevertheless essential to keep track of your portfolio's performance on a regular schedule. But you should not go overboard. Take it easy and rest assured that the long-term value of your investments will eventually overcome any short-term instability. Financial market fluctuations are natural – this is how the cycles form.

Before investing in P2P platforms you should be aware that peer-to-peer loans are not a substitute for overnight money. You must expect that your funds are not available for a certain period. Long-term investments require time, work, and commitment. You won’t profit if you sell your loans on the secondary market at the first sign of trouble or ask for your full funds from your account. If you don't reinvest your earnings, your investments won't increase as quickly as they could, and you'll miss out on exponential growth. These guidelines are easy to follow when the financial market is on the rise. However, the most important is to stick to the long-term investment plan when the circumstances are changing.

As in most cases, there are two sides to every story, so let’s take a look at the benefits and drawbacks of the current financial situation in the P2P sector.

We put all our effort into developing the best solutions to satisfy our investors. This is why FAST INVEST has introduced special measures to manage the part of withdrawals that are delayed. We understand that changes have caused inconvenience to some of our investors and we would like to express our sincere apologies for those that were affected. However, the measures were necessary in order to stabilize the situation caused by the turbulence in financial markets and the following investors’ reaction to the worldwide pandemic.

Thank you for choosing FAST INVEST, we appreciate your understanding.

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