Which statement below accurately describes how peer-to-peer lending works?*

Large banks loan money to smaller "peer" banks in their community, so those smaller banks can afford to give people loans.

Peer-to-peer businesses link investors to personal loan requests. The interest paid by the borrower provides the lender's investment income.

When an individual needs a loan, they find friends/family willing to lend the money, and the peer-to-peer service arranges the legal aspects.

Potential borrowers compete in a series of peer-to-peer challenges, and the winners receive loan funding.