This report analyses and defines the P2P lending mechanism globally
- It discusses the advantages and disadvantages of P2P lending over banks and other financial institutions
- This report includes detailed case studies of existing and inactive companies and examines the potential impact of P2P lending on financial services
- It details the sector’s challenges, market operators, growth drivers and future outlook
The concept of P2P lending started in around 2005, but growth was initially very slow and it took time for people to understand the deliverables and advantages of social lending. The P2P lending market experienced a remarkable boom in 2007, when a range of websites came into the picture and lifted the community lending business. P2P lending is often said to be more economically efficient because it eliminates the middleman, and passes the cost savings on to its end users: borrowers and lenders. As intermediaries between borrowers and lenders (depositors), financial institutions take a spread between the interest they pay on deposits and the interest they receive on loans. A commonly held view is that a key driver of the P2P lending market is consumer disillusionment with the banks’ perceived lack of customer advocacy, and hidden or unfair charges. Investors find that banks can be very rigid with their credit criteria and that they also lack the sense of individual treatment.
This report focuses on the P2P lending industry and details the P2P lending mechanism globally
- It provides descriptions, analysis and comparisons of market structures, market potential, competitive environment, further market development and regulatory frameworks
- It critically analyses the disruptive potential of the service, in the context of both economic and banking theory, and prevailing market realities
- It further describes how P2P lending represents the relationship and transactional approaches to lending, and how it promises to use online social networking tools to make relationship lending available on a mass scale for the first time
- The concept of P2P lending started in 2005, but growth was initially very slow and it took time for people to understand the deliverables and advantages of social lending.
- The P2P lending market experienced a remarkable boom in 2007, when a range of websites came into the picture and lifted the community lending business.
- Prosper and Lending Club are two leading companies in P2P lending industry.
- In pursuing a transactional lending approach, P2P operators are competing head on with banks.
- P2P lending growth could also be fuelled by a demand for credit card debt consolidation.
Reasons to buy
- It provides a background of operators, including details of shareholders and funding, current membership figures, and loan volumes
- It outlines the operating model of each lender, including full details on loan terms, as well as the business model and partnership opportunities for banks
- It gives brief profiles of leading players and reasons for failure of non-active P2P companies
- It looks at the operating costs of P2P operators relative to banks, discusses the challenges and costs involved in marketing P2P lending to mainstream consumers, and then compares P2P lending rates with those currently offered by financial institutions
- It looks at the ways in which P2P lending capitalizes on online social networking tools to scale relationship lending beyond localized communities