Data and Technology
Peer to peer lending platforms - disrupting Asia’s banking corporations By Amaran Navaratnam MICM CCE*
Amaran Navaratnam MICM CCE
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We are in the era of where Finance and technology, the two biggest industries in the world, have joined forces and revolutionised the way consumers are handling money. The commonly referred term we use is Fintech. The combination of the two is not only exciting for those industries, but it’s appealing for those who stand to make money from it. One of many Fintech success stories is the Peer to Peer (P2P) platform, P2P platform I find is similar to the Airbnb & Grab business model, instead of introducing property owners to short term lease’s, or, drivers to people wanting a lift from A to B, the P2P platform introduces SME entrepreneurs to investors seeking a higher Return on Investment (ROI) for short term unsecured loans. The P2P platform is enabling startups to technically “start-up” with the cashflow support it needs by providing an alternative investment and borrowing solution for both the investor and the SME.
Let’s face it, we as investors are all in it to make quick and fast cash with little investment involved. After all, that is what investment is all about!
P2P Vs. Asia’s Banking Corporations P2P platforms are the new way for us to invest and diversify our investment portfolio, with a moral satisfaction knowing that you are giving the opportunity for an entrepreneur to sell what they believe in. The size of the Southeast Asian alternative financing market grew from US$46.65 million in 2015 to a whopping US$215.9 million the following year according to a study jointly conducted by the University of Cambridge and Monash University. With stringent credit risk assessments in place within the Asian banking corporations SME’s are struggling to get cashflow approved. In 2017, Singaporean banking corporations have rejected almost 70% of SME business loan applications
Let’s face it, we as investors are all in it to make quick and fast cash with little investment involved. After all, that is what investment s all about!
CREDIT MANAGEMENT IN AUSTRALIA • May 2019