Home / Without Label / Showdown: Peer-to-Peer Lending Vs. Traditional Banking
Friday, 29 January 2016
Innovation always leaves those behind who don’t adapt quickly. Traditional banking may join that crowd in the not so distant future.
With systems such as Peer-to-Peer lending falling into place, it is only a matter of time.
The real question is ‘When will the banking industry realize this?’
Peer-to-Peer lending is financial engineering at its best. Borrowers have access to quick and easy funds while lenders are provided massive returns on investments very quickly which have no competition among various financial instruments. Everyone is looking for new asset classes where they see a scalable opportunity that can yield play.
For many of them, the attraction of P2P can be summed up in only one word: Returns.
While returns from traditional investment options provide you returns of up to 8-9%, P2P lending provides investors with returns as high as 27% and even more. Investors now look at investment options where there is short duration combined with high yield. It’s combining the liquidity premium with higher returns. It takes the best of both worlds.
Slowly and steadily many institutional lenders are joining and even replacing many of the peers who lend on the websites.
Once the traditional banking industry realises the threat of social lending, we can expect to see more encroachment, partnerships and eventual M&As across the sector.
Distinguishing between the two may not even be possible in 20 years. Whether the banking industry wholeheartedly embraces the crowd or only in a hybrid form is something we have to wait and see.
About Rohan Hazrati
Rohan is the Founder of the Peer-to-Peer lending platform Rupaiyaexchange.
Subscribe via email
Like the post above? Please subscribe to the latest posts directly via email.
What is P2P?
- alternative finance
- bank rate cuts
- benefits for investment
- Bond Market
- CC limits
- consumer loans
- corporate tax rate
- demonetisation impact
- digital India
- digital transactions
- digital wallets
- expectation from budget 2017
- fight against corruption and terrorism
- fintech startups after demonetisation
- GST 4 Slab Structure
- GST bill
- GST tax slabs
- Interest Rate
- Investment options
- Investment plans
- Money Manager
- Mutual Funds
- narendra modi
- narendra modi speech for corruption
- OD limits
- p2p lending
- p2p lending in India
- P2P Loans in India
- pay day loans
- payday loans
- peer to peer lending
- peer to peer lending in India
- peer to peer lending platforms
- Peer to Peer Lending. Plastic currency
- Rs 500 and Rs 1000 banned
- rupaiya exchange
- Short term credit mismatch
- short term loans
- stock market
- surgical strikes on black money
- Union budget 2017
- VAT implementation
- VAT on alcohol
- VAT on food
- why demonetisation
- Change of mindset…to bank you don’t need a Bank al...
- Showdown: Peer-to-Peer Lending Vs. Traditional Ban...
- Celebrate your financial independence!
- Peer-to-peer lending helping MSMEs
- Oil Prices – the fall!
- How peer-to-peer lending platforms are transformin...
- Consolidation of loans – a wise bet…
- How can you help yourself! – A Lender’s perspective.
- When savings are just not enough anymore!
- Is Peer to peer lending dangerous – the myth!
- ▼ January (10)