Should Christians Invest in Peer-to-Peer Lending?

Message Monday: Should Christians Invest in Peer-to-Peer Lending?

Christians and Peer-to-peer lendingPeer-to-Peer lending is all the rage these days. It allows one individual to loan another individual money over the internet, a concept that hasn’t existed before.

Should Christians invest in peer-to-peer lending? I give my opinion on why Christians should not invest in peer-to-peer lending and suggestions on how they can help the needy instead.

Peer-to-peer lending is enables financial misbehavior

Lending money to someone, especially on the internet without a personal connection, does not solve the problem. Someone with thousands of dollars in credit card debt had a problem with overspending, not interest rates.

For example: One customer of a peer-to-peer lending site said “Getting engaged forced me to make some important financial decisions“. That is a good thing. His actions will affect his future spouse's life. However, he continued on saying “so I consolidated several sources of debt with a single loan from a peer-to-peer lender“.

Yes, lowering an interest rates through a peer-to-peer loan could lessen a monthly burden, but it does not pay off the debt. Borrowing money from a different source, including peer-to-peer lending sites, could be hiding the problem – not solving it.

Instead, we should be teaching people financial responsibility. Show them how to budget or teach them how the envelope system works. Help them attend a financial literacy class.

If you don’t know the person then why are you lending him/her money through peer-to-peer lending?

Don’t lend someone a peer-to-peer fish, teach them how to fish instead.

Learn how to spend purposefully and get control of your money

Investing wisely is not about making money off the needy

Everything comes from God and we are called to be wise stewards of His money. Earning interest is fine, but I have to question the method of how that interest is earned.

Putting the money into a savings account or online Money Market account will earn simple interest through banks. Investing in stocks or mutual funds is purchasing pieces of companies that are growing (or, conversely, dying).

However, expecting to earn interest on loans made to individuals through a peer-to-peer lending site is making interest off of the needy. How do I know they are needy? If someone were able to borrow money from a bank or relative then they wouldn’t need a peer-to-peer lending site, right?

“Love thy neighbor as thyself” – Matthew [22:39] convinced me to look closer at my investments.

Peer-to-peer lending just doesn’t fit my integrity model.

Peer-lender to Pure-slave

The rich rule over the poor, and the borrower is slave to the lender.

Proverbs 22:7 says it clear as day! I am not a bank, I am a human being. If my brother comes to me for money I should not have him sign 35 pages of loan documents promising a set interest rate to be paid back in xx-months, I should give him my shirt.

Anyone who has two shirts should share with the one who has none, and anyone who has food should do the same. – Luke [3:11]. I do not wish to make my brother my slave, so lending to an individual is no longer in my vocabulary.

Giving money can be much more effective than lending. A peer-to-peer lending site doesn’t know how your “investment” is used but you have input on how your money can help someone in need.

BTW: If I have the ability to participate in a peer-to-peer lending site then I am able to give instead. Otherwise I shouldn’t be risking the money in this manner. 

Can Peer-to-Peer lenders help?

Of course they can. Peer-to-peer lending sites can give both you and the lendee a better interest rate than a bank, but at what cost?

A believer should consider who is being affected by this type of investment and the side-effects of their actions. I have been tempted to invest some of our emergency fund in a peer-to-peer lending site because of the higher returns.

It was only after talking to someone who had used peer-to-peer lending that I realized I wasn't really helping anyone. I was enabling them to manage their debt instead of eliminate it.

As a Christian, I'd rather teach them how to pay attention – not interest through peer-to-peer lending.

Message Monday - Credit Cards Are Against My Religion
Tips For Getting The Most Out Of Our Giving


  • Tom

    Reply Reply May 4, 2014

    I agree with your blog. However, there are some sites that lend at Zero percent interest rate – for example So instead of having my money in the bank being lent to I do not know who I could potentially help out some small farmer with zero per cent interest loan. What I would like to find is some Christian site that does this.

    • Steve Stewart

      Reply Reply May 6, 2014

      That’s an interesting thought Tom. You are right, money saved in a bank gets lent out to others at a higher interest rate.

      Can you get money out of quickly? If so then this would be a good use for extra cash that ins’t needed right away. (Note: I don’t believe this would include your emergency savings, that has to be very liquid). How much money do you have in

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