PEER TO PEER LENDING MARKET ANALYSIS

Market Concentration and Competitive Landscape

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Increasing adoption of digital platforms and technologies

The penetration of smartphones and internet connectivity globally has bought in a major shift in consumer behavior and preferences. People are getting highly accustomed to accessing services online rather than the conventional way. Financial services were also not untouched by this digital wave. Crowdfunding and peer to peer lending platforms emerged as they perfectly synchronized with the explosion of people spending more time on digital devices. They leverage these online behaviors to effectively connect individual lenders with borrowers through simple digital user interfaces. Paperwork moves online, identity verification happens digitally and the entire process from loan application to repayment monitoring can be undertaken from anywhere using a smartphone or computer.

Advancements in analytics have enabled these platforms to develop robust risk assessment models. Machine learning algorithms are fed vast amounts of alternative financial and behavioral data to profile borrowers better. This helps lower risks for lenders and makes funding opportunities more inclusive for borrowers without collateral. Increased adoption of digital payments has further strengthened collection capabilities for peer to peer lenders. Through online money transfers, lenders receive timely payments directly without manual intervention. Borrowers too find it convenient to repay electronically as per schedules without any physical hassles. Overall, the confluence of digital technologies has played a pivotal role in propelling the peer to peer lending industry to its current scale by fixing scalability challenges of traditional lending models.