Top 5 Peer-to-Peer (P2P) Lending Platforms in Cyprus 2024

Are you an investor from Cyprus seeking opportunities in P2P lending? Discover the best platforms for investing in peer-to-peer lending in Cyprus at this moment:

Best local platforms for peer-to-peer lending in Cyprus

Cyprus has a limited number of native P2P lending platforms. The following are the most notable Cypriot P2P lending platforms:

Kviku Finance

History of peer-to-peer lending in Cyprus

Peer-to-peer (P2P) lending started in Cyprus during the early 2010s, following the global financial crisis that severely impacted the Cypriot banking sector. This alternative financing model was adopted as a response to the tightened credit conditions and the need for businesses and individuals to access funding more efficiently and innovatively.

The P2P lending concept was initially slow to gain traction in Cyprus, but over time, as banks continued to struggle and the public became more familiar with the benefits of P2P lending, the industry began to grow. Several international platforms emerged to cater to the Cypriot market, with some focusing on consumer lending, while others targeted small and medium-sized enterprises (SMEs).

In comparison to other markets, the P2P lending industry in Cyprus remains relatively small with only a few local platforms like Kviku Finance. However, it has experienced significant growth in recent years, and analysts expect the trend to continue as more and more Cypriots become familiar with the concept and the benefits it offers.

Like the neighboring country Greece, the Cypriot market is also very small in terms of the number of platforms, but not in the interest in the concept from investors.

Best foreign platforms for P2P lending in Cyprus

Some of the best platforms for P2P lending in Cyprus are those that offer the lowest fees and the highest returns. Some of the most sought-after platforms in Cyprus include:

Lendermarket: This user-friendly platform offers various P2P lending options and is a popular choice among Cypriot investors. It boasts low fees and a diverse range of high-yield loans.
Esketit: This platform specializes in short-term loans and is highly favored in Cyprus. Esketit presents investors with the chance to invest in projects with promising returns.
Reinvest24: This platform provides investors with crowdfunding opportunities in different parts of Europe. Its focus is on granting investors access to equity investments in real estate projects.
AxiaFunder: This unique platform concentrates on litigation crowdfunding, making it an excellent option for Cypriot investors seeking a different kind of investment. It allows investors to invest in various lawsuits.
PeerBerry: This platform stands out for its wide selection of P2P lending options, including personal, business, and real estate loans. It also offers investors the chance to invest with a buyback guarantee.

These platforms give Cypriot investors access to low-cost loans and the potential for higher returns through P2P lending. Each platform offers its own unique features, and investors should conduct thorough research to determine which one is the best fit for their investment goals.

Regulation of P2P lending in Cyprus

In Cyprus, peer-to-peer (P2P) lending is regulated under the broader financial services industry, overseen by the Cyprus Securities and Exchange Commission (CySEC) and the Central Bank of Cyprus (CBC). P2P lending platforms must comply with various laws and regulations, including licensing requirements, restrictions, and consumer protections.

As Cyprus is a part of the European Union, both investment-based and lending-based crowdfunding services related to business financing in Cyprus are also required to be licensed as Crowdfunding Service Providers due to EU legislation (Regulation 2020/1503).

You can find a list of fully regulated Crowdfunding Services Providers here.

Taxation of P2P lending in Cyprus

Investors in Cyprus are required to report their P2P lending interest income and any capital gains in their annual tax returns. It is important to keep accurate records of all transactions and interest earned from participating in P2P lending activities to ensure proper tax reporting.

Most P2P lending platforms don’t automatically report your taxes, which means that you bear the responsibility for the reporting when investing in P2P lending. Many platforms provide a country-specific tax report, that makes it fairly easy to do your taxes.

For investors using other European P2P lending platforms, double taxation agreements between Cyprus and the platform’s country may come into play. These agreements help prevent investors from being taxed twice on the same income. It is essential for investors to understand the specific tax rules and regulations applicable to the foreign platform’s country to ensure compliance. A foreign platform will often inform you if they withhold tax or not.

FAQ about P2P lending for Cypriot investors:

In Cyprus, utilizing foreign platforms for P2P lending offers several benefits to lenders. Firstly, it provides access to a larger pool of potential borrowers and a wider range of investment opportunities. Furthermore, foreign platforms may offer more attractive rates and terms than domestic lenders. By using foreign P2P lending platforms, investors can tap into a more diverse and global investor base, boosting investment liquidity and reducing risk.

Using a local platform for P2P lending in Cyprus can offer numerous benefits. One of the most significant advantages is the easy accessibility it provides to both borrowers and lenders within the Cypriot community. This can be particularly appealing if you are interested in supporting your local economy. In addition, local platforms can offer more personalized services to borrowers who are familiar with the local market, taxes, and regulations. By using a local platform, you can also avoid the potential costs associated with foreign exchange rate conversions when transferring funds from foreign lenders.