Then answer the following:
Why is there a disproportionate number of people of color in the foster care system?
How does poverty impact the child welfare system?
• Risk of Default: There is no or less recourse to the investors against the issuer, in case of default or fraud. Funds are not directly solicited by the issuer and the issuer also does not come out with any offer document. Funds are solicited by the platform and such platform may or may not conduct proper due diligence of the issuer. If a platform is being temporarily shut down, or closed permanently, no recourse is available to the investors. Further, there is no collateral (even in case of P2P lending), as in the case of Corporate Bonds. In P2P lending, there are no investor protection mechanisms by way of a compensation scheme to cover defaults like deposit guarantee schemes for bank deposits. • Risk of Failure: This is heightened by the fact that the funding is potentially by participants who do not have the skills and experience needed to assess the risk before investing/lending, as compared to the VCF/PE Investors, banks or other financial institutions who provides funds under the traditional business model. • Risk of Fraud: This is the red flag that keeps all regulators weary of this mechanism. There is possibility of genuine websites being used by fraudsters claiming to be promoters of projects or of false websites being established, simply to defraud the investors or to entice individuals to provide credit card details etc. Thus, there is a risk of misuse as well as cyber-security and/or identity theft. 3.4 Crowdfunding vis-à-vis other sources of capital financing The 2008 Financial Crisis resulted in failure of number of Banks and, consequently, the new capital adequacy regulations for banks, such as Basel III were implemented. As a result, credit providers became increasingly constrained in their ability to lend money to the real economy. The amount of bank loans made in Western Europe and the USA dropped significantly at the beginning of the crisis. While there have been some signs of recovery in the US (although the growth rate is still below pre-crisis levels), in Western Europe the growth rate in loans to the non-financial corporate sector has been negative, especially to SMEs in the EU. In this funding vacuum, peer-to-peer lending and other crowdfunding platforms are growing in popularity, as bank liquidity is reduced and new regulatory requirements make obtaining>GET ANSWER