In Private lending the loan is against a single property whereas in MIC your money is lent over a bunch of different properties. This is because your money goes to a pool and all mortgages are issued from that pool so one investor’s money is spread out in different mortgages.
In MIC your money is always working for you. A Private lender lends for a period of 1 year and then may have to wait 2-4 months to find a suitable mortgage to lend their money on. Also smaller investors may have a hard time to find mortgages of smaller size. Whereas a MIC has resources to lend on different size mortgages and often has a Line of Credit from a bank which allows the MIC to stay invested in full all the time. So even after paying a fee for administration, a Private Lender can get better returns over the long term with lesser risk.
Investors in a MIC do not need to spend time on administrative tasks such as dealing with lawyers, collecting back from borrowers. A Private Lender also needs to possess knowledge of properties etc which can be a tedious job.