( CNN ) It 's said that lending to friends is a good way to lose them , but how about lending to a complete stranger ? Since the world economies went into a tailspin in 2008 , getting a bank loan has gotten harder . But it 's also opened up the market for others to step in . Welcome to peer-to-peer lending , a platform where people lend money to each other over the internet . `` You can get actually a better deal by looking at people around you , looking at your community , '' says Soul Htite , the founder and CEO at Dianrong , a peer-to-peer lending company based in Shanghai . Acting as a broker between lenders and borrowers , peer-to-peer lenders say they can offer a better rate to both sides without the weight of regulation and the expensive branches that typically make high street banks so cautious . For many , these platforms are shaping up as the future of banking . `` I doubt that people born today are ever going to have a bank account the same way you and I have a bank account , '' Htite told CNN . `` I think we 're going to see the banking world completely transform . '' China is home to the biggest rise in peer-to-peer lending and Dianrong claims to be growing at a massive 20 % each month . It fits well in China where people will typically first approach relatives for any large-scale loan . China 's state lenders are also notoriously regulation-bound and cumbersome , meaning that for many 'shadow banking ' and , now , peer-to-peer platforms are the only way to get small and medium-sized businesses off the ground . Peter Renton , a peer-to-peer blogger who recently made a foray into investing raising $ 28 million this year for Lend Academy Investments LLC , regularly writes for an audience of 20,000 on his website that provides news and advice on peer-to-peer lending . In the United States , peer-to-peer groups such as LendingClub and Prosper allow borrowers to apply for loans of as much as US $ 35,000 payable over three or five years . The companies use technology to do due diligence . When a borrower is accepted , the loans are listed on the websites calling on institutions and individuals to back them . Initially , the P2P platforms attracted retail investors , but increasingly big institutions and hedge funds have become interested in the platform . Companies such as have LendingClub currently projects returns of between 5.4 % and 9.4 % . `` It 's funny because it 's sort of come full circle , '' Renton said . `` Banks are now participating in P2P lending . `` It 's very simple , it 's very fast . Really , you can do it in your pajamas at two in the morning . That is the beauty from the borrower perspective . `` From the investor perspective , it 's for the first time ever , people have been able to invest money in their fellow citizens . ''
Acting as a broker between lenders and borrowers , peer - to - peer companies say they can offer a better rate to both sides . China is home to the biggest rise in peer - to - peer lending . One company claims to be growing at a massive 20 % each year . In the US , P2P sites such as LendingClub and Prosper encourage users to apply for loans of as much as US $ 35,000 .