8.1 Online platforms
Traditionally, banks acted as intermediaries by gathering together small deposits and lending out larger amounts of money. The intermediary in alternative finance is an online portal, or platform, which is a website that allows lenders and borrowers to have instant access to information about the business or project that needs funding. Funds are raised over a fixed limited time, usually a couple of months. Online platforms are not regulated to the same extent that banks are. The pooling and decision to lend is managed by the platform, which is compensated through fees or charges.
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