2016 P2P lending industry trends by Bondora

The peer-to-peer lending market is looking for another massive growth from 2016, but before holiday season kicks in, we here at Bondora have decided to dig deeper to see what will be the underlying trends shaping the surging industry in the new year.bondora_2016_light_bulb

Institutional money

We have started to see first signs of institutional investments coming into peer-to-peer lending platforms in Europe and we expect to see a significant rise in this trend, as fund managers seek higher yields when rates on money markets continue to be at historic lows. High net worth individuals and smaller institutions are already investing on P2P platforms in Europe, including on Bondora.

Banking ties

The surging growth of peer-to-peer lending has started to worry dominant banking groups around the world, and they are working on their responses. Some have started to look at nurturing their own FinTech startups, opening accelerators and incubators of their own (HSBC, Nordea), some have launched their own offering (Goldman), and others are buying stakes in newcomers to be best positioned in changing times. At the same time many banking groups are still ignoring this revolution. However, we are very confident that there is a lot happening in this field in 2016.

Going global

The peer-to-peer lending market is becoming increasingly global. The market was lead for years by the United States and the United Kingdom, but China is already the largest P2P lending market globally, with more than 1500 platforms, according to Standard Chartered. We are seeing a rise in many new markets and we expect to see increasing demand for cross-country investment opportunities like the one Bondora is offering. It’s hard to see investors creating 30+ accounts to trade on every European market.

Small businesses lending growth

Peer-to-peer lending was initially created to provide small loans for consumers – to find financing for repair-work or any other small loan which the banks were not willing to give or when their offering was too cumbersome for consumers to deal with.

Today we have seen a rise in small businesses using P2P as their financing platform and we expect to see a significant rise in this trend during the New Year. For many small enterprises lending a few thousand or a few tens of thousands euros through a bank is still a no-go – P2P lending is offering an increasingly attractive solution for companies across Europe.

Regulator

Like for any new financial service, the regulators role will also be important throughout 2016. They have had a massive impact on the P2P lending business, and this is set to continue as officials in some of the key markets like United States and Britain are working on the new rules based on the “golden standard” set by the FCA in the UK. Estonia is already rolling out new lending regulation that also covers P2P platforms.

The industry is entering another fascinating year with underlying fast growth coupled with some twists and turns.

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5 thoughts on “2016 P2P lending industry trends by Bondora”

  1. Why there are no blog posts about following topics, what would be important to investor:

    * Bondora rating model changed – what changed, how does this affect investors
    * Bondoras analysis about Bondora rating – as RahaFoorum analysis was inaccurate
    * Bondora B-secure loan abuse and suden rise in defaults (About 10% increase in default rate for the 2014 loans), any comments at all?
    * All loans moved from stage 2, stage 3 back to stage 1. There are reports that some stage 4 loans moved back to stage 1 – what does this mean to investors, does investors have to pay for collection cost from moved back loans.
    * How are collection agencies perfoming
    * First Estonian api beeplus.me

    1. Hi Mart,
      Thanks for your input. Most of these topics will be addressed in the beginning of next year.

  2. What issues are addressed this year?

    Lets say you have 2000 E in your bank account, next day you end up having 1800 E. You ask from, bank where is 200 E, and you will get answered, that you will be replayed next year. How would you feel? Furious or calm?