Marketplace Lending in 2017: Trends and Expectations

2016, a look in the rearview mirror

In mid-2016, the marketplace lending sector experienced some turmoil leading to increased scrutiny from regulators and institutional investors’ concerns about the securitization process and the quality of the underlying loans. However, this slowdown was temporary and personal marketplace loans globally grew by 210% (+64% for small business marketplace loans).

2017, what to expect

Several trends are to be watched for the year to come, some that were already driving the marketplace lending sector in 2017, and others that emerged more recently:

- Partnerships: by nature, banks and fintech companies have different advantages: the formers having an easier access to equity easily and an existing customer base, while the latters provide cutting-edge technologies and a more customer-centric approach.

- Technology: the perpetual technical innovations that power the growth of the fintech ecosystem are often behind the success of the marketplace lending sector.

- Diversification and consolidation: if most marketplace lending platforms originally specialized in a single niche, they tend to develop their offerings by entering new lines of business, as they grow.

- US regulatory reforms: even if the new administration’s upcoming changes to the regulatory requirements have yet to be fully disclosed, its desire to renew the American “entrepreneurial spirit” through the dismantlement of the Dodd-Frank Act (that is seen as a barrier for small businesses’ access to credit) might translate into more flexible regulations for marketplace lenders.

Crowd Valley’s framework is used worldwide by both upstart and incumbent lenders, and our team has years of expertise in the field. Any interested party shouldn’t hesitate to get in touch. 

Read the whole article on Crowd Valley News.

Picture: Credit Peers, an example of an innovative specialized lending service.