You are here : Home / alternative finance / p2plending / peer to peer lending / peer to peer lending in India / peer to peer lending platforms / Why Peer-to-Peer Lending is here to stay
Monday, 15 February 2016
We have discussed how new P2P Lending platforms are proving to be more and more efficient. This is especially true when you consider how banks function. Though, this new industry is still representing only a fraction of the volume of loans that banks process, at present, P2P lenders can compete with larger banks due to favourable regulatory treatment and use of sophisticated technology.
While banks are definitely pushing forward to become more technologically advanced and with P2P Lending becoming a global phenomenon resulting in more regulations, is there a possibility that marketplace lenders are only a temporary phenomenon? We don’t think so.
Banks and P2P lenders operate in a very different way. Banks essentially earn a major part of their income from the arbitrage on interest rate. This means that banks continue to borrow at minimum interest rates and lend at maximum rates. On the other hand, market place lenders bring together borrowers and lenders, try to get better deals for both and as a result charge fee from a closed deal. This means that they are more efficient and more transparent. Instead of preying on the ignorance of their customers, they charge a fee which clearly defines how much the customers have to pay and why they are paying it.
With this amount of efficiency and transparency, P2P Lenders are more effective to form good relationships with their customers and build this on trust. It is this trust which drives both borrowers and lenders back to marketplace lenders every time credit is required. This is a great contrast to banks. Banks drive to extract value from their customers and use it to
the banks’ advantage instead of creating value for their customers.
Firms in the financial sector have access to immense data and this can either be used for the gains of the firm itself or to create meaningful insight for their customers.
Marketplace lenders are placed to win, given their use of technology and their primary motivation: creating value for their customers.
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
- A Way of Helping – Medical Emergency Loans
- Pay Day loans
- Gold vs. Peer-to-Peer Lending
- Real Estate vs. Peer-to-Peer Lending
- Stocks vs. Peer-to-Peer Lending
- Recession Friendly Investments
- Why Peer-to-Peer Lending is here to stay
- Role of technology in alternate finance: Part 2
- Role of technology in alternative finance - Part 1...
- Why is P2P Lending becoming more popular with inve...
- Entrepreneurs: Peer-to-Peer Lending vs. Crowdfundi...
- Risk and rewards can be inversely proportional - S...
- Four predictions for P2P Lending in 2016 for India...
- Route to Alternative Financing
- Start-ups turn to P2P Lending
- What does P2P lending Advocate?
- Understanding your alternate credit score
- ▼ February (17)