Friday, April 18, 2014

Peer-to-Peer Lending (aka Online Lending) Is Growing Like Crazy: Wall Street's Long Term Growth Rate Is Lower As a Result

Disintermediation of Wall Street Banks is just beginning and I'm sure the likes of JP Morgan and BoA think it's all a bit of a joke at this point.  But if there was ever an industry ripe for disruption and disintermediation, US financial services is it.  We see it in wealth management but P2P lending is where it's most advanced with Lending Club and Prosper leading an increasingly crowded field.  In China, at least as much in need for new financial services as the US, the industry is also taking off.

Hedge funds could be both winners and losers.  Funds which lent to small businesses at 20% because there was no other funding available at any price, will be losers.  However some smaller hedge funds are attempting to join the online party and are actively buying loans via the likes of Lending Club.

And, naturally, wherever there is disruption and potential lottery ticket payoffs, there we will find Silicon Valley VCs.


Here's a selection of recent stories in the FT covering this space:

http://www.ft.com/intl/cms/s/0/9792f3d2-c0a5-11e3-a74d-00144feabdc0.html?siteedition=intl#axzz2zGVe6Npf

http://www.ft.com/intl/cms/s/0/4c55ae50-9035-11e3-a776-00144feab7de.html#axzz2zGVe6Npf

http://www.ft.com/intl/cms/s/0/fe75cbd6-c651-11e3-9839-00144feabdc0.html#axzz2zGVe6Npf

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