Lending Club: Peer-To-Peer Marketplace Aims To Lend Invisible Hand To Middle-Class
Harvesters,
Last year a Harvard Business School professor by the name of Karen Mills asked a simple question that would eventually change my fundamental perception of the consumer finance sector: "Is there a a credit gap in small business lending?" My first thought was, "Of course there is a credit gap", but the real question was, is this gap warranted?
Here is an excerpt from my analysis: "During the economic recovery over the last several years, a number of new online lenders and marketplaces began to rise from the very ashes of the distrusted financial institutions before them in order to offer credit to those who were effected the most from the distrust: small business owners. This new alternative to lending disrupted the traditional sources rapidly; as start-ups began to change the way we evaluate small businesses, small businesses began to change the way they evaluated their lenders.
Due to a multitude of factors, the credit gap in small business has continually been exacerbated during our so-called recovery. In addition to this, peer-to-peer lending in general can not only eventually help small businesses, but could potentially assist the millions of Americans who accumulated trillions of dollars in debt during the Great Recession.
The disdain between the younger generation and financial institutions is mutual. Due to this indifference and the monumental shift towards technological solutions, the alternative lending sector appears to be a natural fit for the millennial generation.
As evidenced by our economic history, sectors tend to flourish after Wall Street finds different ways to securitize it. The first securitization of P2P loans just hit the street; and naturally, Wall Street is hungry for more.
Below is my analysis on Lending Club, and the peer-to-peer lending sector in general.
-Taylor
Last year a Harvard Business School professor by the name of Karen Mills asked a simple question that would eventually change my fundamental perception of the consumer finance sector: "Is there a a credit gap in small business lending?" My first thought was, "Of course there is a credit gap", but the real question was, is this gap warranted?
Here is an excerpt from my analysis: "During the economic recovery over the last several years, a number of new online lenders and marketplaces began to rise from the very ashes of the distrusted financial institutions before them in order to offer credit to those who were effected the most from the distrust: small business owners. This new alternative to lending disrupted the traditional sources rapidly; as start-ups began to change the way we evaluate small businesses, small businesses began to change the way they evaluated their lenders.
Due to a multitude of factors, the credit gap in small business has continually been exacerbated during our so-called recovery. In addition to this, peer-to-peer lending in general can not only eventually help small businesses, but could potentially assist the millions of Americans who accumulated trillions of dollars in debt during the Great Recession.
The disdain between the younger generation and financial institutions is mutual. Due to this indifference and the monumental shift towards technological solutions, the alternative lending sector appears to be a natural fit for the millennial generation.
As evidenced by our economic history, sectors tend to flourish after Wall Street finds different ways to securitize it. The first securitization of P2P loans just hit the street; and naturally, Wall Street is hungry for more.
Below is my analysis on Lending Club, and the peer-to-peer lending sector in general.
-Taylor
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