by: Grow VC Group
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Online marketplaces emerged following the 2007-08 global financial crisis and have shown consistent growth since.

Lending Club’s success is an example of how borrowers and lenders alike are shifting away from traditional lenders, towards fintech and online financial services. In the nine years since inception, Lending Club has originated US$16 billion in loans. According to a recent survey by the US Federal Reserve, ‘As of early 2014, almost one in five small-business borrowers sought financing from an online lender’.

Let’s say that again, out loud: One in five.

If that doesn’t speak to the potential for disruption, then disruption is all but a foregone conclusion. In the UK too, there is a similar trend. Today, UK based Funding Circle is already the third largest lender to the UK small business sector. Considering their competition comprises banks with hundreds of years of combined experience in lending, this is quite an achievement.

Adequate risk identification and assessment is a key contributor to future platform success. We highlighted the importance in a recent article.

And what of stress testing or the ability to withstand a recession. Almost all online lenders emerged in the wake of the global financial crisis, and haven’t yet had to contend with such a market environment. Interestingly Lending Club did face the 2007-08 crisis, and delivered positive returns of 1.84% during that period, while the S&P 500 lost one third of its value during the same period.

Find out how to evolve traditional lending and deliver customer needs through online marketplaces. Our team has helped banks and other traditional lenders around the world fast-track plans and get ready to face the online opportunity.

Read the whole article and more market details at Grow Advisors Blog.

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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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