The peer-to-peer market in China today is just north of USD$100 billion in loans outstanding. Sounds like P2P can grow to be quite big in markets like China if it simply captures a slice of the pie. So the answer differs a lot in terms of scale in different countries. there’s a huge amount of consumer-borrowing need, there’s also a huge amount of retail investing need - and in the case of China, where the banks are 80%–90% non-retail because there are easier places to make money and it’s more socially rewarding to be a corporate banker than a retail banker - the market’s going to be big because the traditional players aren’t going to grab the consumer lending as fast. If you go to places like India, Indonesia, or China, where . Lending Club and the like are eight or nine years into the business but still not very big. In the United States, the consumer market’s already been dominated by the banks. Is P2P a big enough market for financial institutions to enter? And you’ve got the whole thing.īy the way, P2P is where we started but it now represents about 10% of our flow. A lot of your borrowers have money and can become investors. I always joke with bankers: If you want to be the biggest P2P companies in the world, what you do is you take all the data from your credit card company and you split it off on a separate platform. But the truth is that you always need someone who’s going to have credit capability and platform capability to bring people together. Gregory Gibbs: We think of P2P as the end-to-end linkage online between a borrower and an investor, taking out intermediaries. Larry Cao, CFA: How would you define the P2P business? Recently, I sat down with Gregory Gibb, CEO and chairman of Lu.com, in his office in Shanghai to discuss how the industry will evolve. Lu.com (陆金所) is one of the world’s largest players in the P2P market. As such, it is generally considered a disruptive form of fintech. In a P2P transaction, money can flow from the lenders directly to borrowers through the P2P platform, bypassing the traditional banking channel. Peer-to-peer (P2P) lending is a form of direct lending between lenders and borrowers. Posted In: Drivers of Value, Future States
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