18.12.2015 P2P Lending Platforms - the future of financing
Statista DMO reveals: P2P Lending Platforms - the future of financing
On December 1st , during a panel discussion, JPMorgan Chase & Co. CEO Jamie Dimon implied that plans of collaboration with peer-to-peer lenders were in the making.
According to Statista’s Digital Market outlook on FinTech, annual transaction volume is expected to increase by an average of 80 % in the next five years, the market of online peer-to-peer (P2P) lending platforms in the private/retail customer segment shows enormous potential in the United States.
User friendly solutions have not been easy to find so far, as taking up bank loans usually involves bureaucracy and lengthy processes. The new solution on the market is called Crowdlending - online P2P lending platforms on which investors and credit seekers are connected and individuals as well as companies are offered an easy way of raising capital. Through online brokerage portals, such as Us based Lending Club or Kabbage, individuals or small and medium enterprises (SMEs) can place their financing requests. In Germany, Auxmoney and Zencap (recently acquired by Funding Circle) are also well known providers.
First, a scoring of the applicant, based on credit request, will be created by the operator platform. In the meantime, the designated use and a risk-compliant rate of the credit request are determined and made visible alongside general profile data for potential investors.
Unlike banks or other credit institutions, this form of liquidity offers individuals, as well as small and medium enterprises, an easy and flexible way to take up loans. The processing time of loan applications usually takes anywhere between a few hours and days.
With small and medium-sized enterprises in particular, this model has enormous potential . This year, the transaction volume of B2B lending platforms in Europe will be about 3.16 billion USD. This is a very manageable sum when looking at market leader America. The volume of transactions for business loans in the U.S. will amount to 8.489 billion USD for the year 2015.