How would P2P lending be affected during a financial crisis and how could maximise the platform in the midst of the crisis ?

In essence, P2P lending serves a market of companies that cannot get financing from banks because they are (a) too small (b) too weak financially or (c) too new (no track record). Basically, it would be too risky for the bank to take on these firms.

Regardless, a financial crisis is likely to affect all companies, but of course at different extents. During a financial crisis, debt financing would be more challenging to get from the banks, especially with one like the '08 crisis that was related to credit strenghts and ratings. I suspect these 2 phenomenon might happen...

(1) More firms move to P2P to seek debt financing. Firstly, because banks are not financing them anymore, and secondly because their cashflows are affected by the crisis such that they would need alternative sources of funding to continue operations.

(2) Liquidity for financing drops. The bearish market sentiment will likely cause more retail investors in the p2p space to invest less also. This means that more loans would go unsubscribed and borrowers may not be able to seek the financing that they require

In essence, demand for p2p financing increases (more firms seeking loans) while supply of p2p2 financing decreases (fewer retail investors). This will probably cause loans to go unsubscribed, but would likely have the impact of causing interest rates to rise based on the forces of demand and supply (so that fewer firms turn to p2p and more retail investors turn to p2p) Cost of debt would therefore increase for firms, while investors have more alternatives to seek high returns.

It will be risky though. Everyone may lose money and jobs which result in lower spending power and afraid to spend money. Business loan from u but they might default due to lack of business. You will have business using P2P lending for money but you might not get it back. You have to see what the business do and think like a customer. What would you stop buying straight away when you are having financial problems then that business you should not lend money unless for some reasons you know they are good and reliable.