The global peer to peer lending market has been segmented by different end-user, business model and geography.
Peer-to-peer lending market is a small fragment of the financial market that involves several governing restrictions in different regions. The regulations are actually dependent upon the national guidelines, along with original banks as partners in effective business is mostly a major concern.
The regulatory process also involves confirmation of debtor’s data by the credit agencies or any other peripheral monitoring bureaus. However, this methodology for the validation as well as documentation varies depending upon the country.
One of the major factor expected to drive peer-to-peer lending market in upcoming years is rising developing markets on account of development in knowledge of lending at marketplace, better transparency for investment as well as reduced rates of interest to consumers.
Prosper, a U.S based P2P lending company has more than 2 million members and their total lending is more than $6 billion and Zopa, a UK based P2P lending company has supported a total of more than £1.4 billion of P2P loans and currently has some 60,000 investors lending to its borrowers base which is in lacs. Many companies since Zopa and Prosper have successfully launched their own marketplaces.
The combat amongst the governments and disruptive models of industry is at its fullest extent. Moreover, with the outburst of tech startups across the globe the entire market is turned upside down.
The technique societies, countries as well as ecologies function has been disrupted to a noteworthy level. On the other hand, there are still certain nations that don’t have any supportive regulation for this new epoch.
Nevertheless, ecosystem of the startups’ is mounting with the lightning fast speed whereas laws by the regulatory bodies are not capable to move along with this pace, particularly countries other than the United States.
Peer to peer lending is also acknowledged as social lending or crowd lending. In such type of lending model the intervention of financial organizations is not mandatory.
Moreover, assessment technique of loan instigation is given into the hands of private moneylenders as well as borrowers, also websites such as Prosper.com offers them with a platform in order to involve them with each other. Now, under such platforms borrowers usually describe the purpose of their loan appeal followed by the information related to their existing financial situation, that includes salary and open credit positions, depending upon which the lenders approve the loan.
Geographical segment of the global market further analyzes across, Europe (Germany, UK, France & Rest of Europe), North America (Canada, U.S. & Mexico), Asia-Pacific (Australia, China & rest of Asia-Pacific) and LAMEA (Middle East, Latin America & Africa).
Since past few years, North America led the market with highest peer to peer lending market share. Key factors driving the market of North America are less interest rates in conventional banking, growing reliability over online platforms and consequences of previous financial crisis.
Some of the key players operating in the competitive landscape of the global peer-to-peer lending market include Prosper Marketplace Inc., Common Bond Inc., Circle Back Lending Inc., Upstart Network Inc., Peerform, Social Finance Inc., Funding Circle Limited and Pave, Inc. Prominent players of the market are looking ahead for marking developments to cater the expectations of their customers as well as maintain their position in the market.
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