Chain Lending, also known as chain lending or chain lending, emerged in the 2000s, mainly in the United States and the United Kingdom, as an alternative financial practice.
Origins
1. *Business model*: Chain Lending originated from crowdfunding and peer-to-peer lending business models.
2. *Online platforms*: Platforms such as Prosper (2005) and Lending Club (2006) popularized the concept.
Characteristics
1. *Peer-to-peer lending*: Individuals lend money directly to others.
2. *Lending chain*: Money is lent and relent between participants.
3. *Interest rates*: Lenders receive interest on their investments.
4. *Risks*: Exposure to credit, liquidity and regulatory risks.
Regulation
1. *SEC (USA)*: Regulation of securities offerings.
2. *FCA (UK)*: Regulation of financial activities.
3. *CBRC (China)*: Ban on Chain Lending in 2017 due to financial risks.
Notable examples
1. *Lending Club*: One of the first peer-to-peer lending platforms.
2. *Prosper*: Another pioneering platform in the model.
3. *BitConnect*: Example of a fraudulent Chain Lending scheme.
Risks and criticisms
1. *Credit risk*: Difficulty in recovering investments.
2. *Liquidity*: Difficulty in selling or redeeming investments.
3. *Lack of transparency*: Difficulty in assessing risks.
4. *Scams*: Ponzi schemes disguised as Chain Lending.
References
1. Investopedia: "Chain Lending"
2. CoinMarketCap: "Chain Lending"
3. Financial Times: "Chain lending: the risks and rewards"
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