What You Need to Know About Peer-to-Peer Lending Apps Like Yahoo Tanda
Yahoo Finance is committed to monetizing one of the oldest forms of interest-free lending.
Launched by Friday and available on Android and soon iOS, Tanda does exactly what its name suggests. This allows you to join groups of people to work together towards your savings goals, in tandem: each user deposits an agreed amount into the bank, choosing when they receive money. Those who need it earlier pay a commission, while those who wait the longest receive a 2% bonus. According to Android Police, Yahoo Finance takes eight percent of the first payout and seven percent of the second payout.
In essence, it is a digitized circle of lending. For example, if each of five people pays $ 100 a month for five months, each person gets $ 500 one month. If you are one of the first to get money, it is like a low interest loan. If you’re one of the latter, this is a way to save money (and get a bonus with the Yahoo app). These types of credit systems have been around forever informally, between family, friends or neighbors, and according to NPR are known as tandas or cundinas in Mexico, pandeiro in Brazil, susus in West Africa and the Caribbean, and hui in Asia.
When done between friends, the system acts as a way to provide an interest-free loan to whoever needs it, while simultaneously acting as a kind of store of value for people who receive later payments. You won’t leave with more money than you had (unless you get a savings bonus), but you help friends and work towards your own savings goal.
Yahoo Finance is not the first company to ponder monetize more formal version of this system – site eMoneyPool open to the public and serves more than 2013 $ 3 million , and the application KyePot and Cashare serve the same purpose. On Tanda, users receive a trust rating, with higher scores allowing users to access larger cash pools, up to $ 2,000.
So even at higher levels, it is a store of value for relatively small amounts of money. But Yahoo cites research from the National Bureau of Economic Research that people save more when they do it in groups. For example, in one experiment, researchers found that people who were tasked with saving and who had the opportunity to publicly announce their progress saved nearly twice as much as those who did not. (To that end, the app also has a Venmo-style social feed where users can comment and add updates.)
If someone falls out, Tanda covers his share. So far, reviewers have pointed to some frustrations when using the app, such as having difficulty increasing their “trust score” when they start from scratch. But as a way to stay on the path to savings, it’s worth trying.