With a boom in fintech startups globally, P2P lending has emerged as a relatively new kid on the block of alternative lending. According to an October 2016 report released by accountancy firm KPMG and the Cambridge Centre for Alternative Finance, the global P2P lending market is worth $130 billion.
As the industry is gradually surfacing into the mainstream, Brahma Mahesh Khaderbad, Co-founder and CEO, FinMomenta, a Singapore-based fintech startup in an interview with Techseen explains how P2P platforms have managed to cause their fair share of disruptions.
Techseen: How are peer-to-peer lending platforms transforming the consumer lending industry?
Khaderbad: Peer-to- peer lending is a paradigm shift for entire financial industry. Over the years it has proved to be a streamlined lending process. Today, Consumers are increasingly looking for investment products that generate higher returns than traditional savings accounts offered by banks. At the same time millennials are becoming a larger portion of the consumer loan market as they seek
credit to finance major purchases or refinance their student debt.
In the current scenario only about 10% of the population in India get financial help from Banks as they highly rely on Credit Bureau Scores to evaluate borrower creditworthiness. Consequently, large number of loan applications gets rejected and the applicants do not get the loan sanctioned by Banks. But with the simplified lending process, P2P lending is filling the gap.
This is where platform like ours have emerged as a game changer in the consumer lending industry
as we have our own proprietary credit scoring model to identify borrowers’ creditworthiness. Since
inception we have covered large population who remain un-served by Banks. Borrowers are not
required to move out of their home/office and visit a bank; they can apply for the loan anytime
from anywhere and avail a loan.