P2P lending refers to a new type of loan extension to individuals or businesses through social network services or the Internet and covers a wide range of services, including loans to startups and self-employed businessmen with their interest rates on such services hovering at 10 percent. The borrowers are required to redeem the principal and interest on a monthly basis.

Terr Funding links housing loan borrowers and investors through the Internet where loans are secured by property collateral and investors receive a fixed return on a monthly basis.

"I feel very proud of my business as Tera Funding can loan money at an affordable interest rate to people desperately seeking loans that usually have a high interest rate," Yang said.

Property developers, whose access is limited to commercial banks due to their small-sized business, can raise money at an affordable interest rate hovering above 10 percent, while retail investors can get an investment opportunity.

Local banks shunned lending to such small businesses amid a protracted economic slowdown, but for investors hunting for high returns, P2P lending emerged as an alternative investment tool amid record low interest rates in Asia's fourth-largest economy. (Yonhap)