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> Posted by Tyler Aveni, Research, PlaNet Finance China
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Peer-to-peer (P2P) lending is on the rise – as evident by the hundreds of articles on the subject that have sprung up just this year. However, P2P, generally defined as individuals bringing together small sums of money to lend to other individuals, is hardly a new concept. Moreover, this process of lending amongst communities of small businesses and friends has been moving online for a decade now. And while money is now most commonly transferred between strangers, interconnectivity online has allowed the process to feel almost as intimate as lending among friends and family.
The two earliest entrants into the P2P industry have gained steady followings since their beginnings in 2005: Zopa, a large commercial P2P platform in the U.K. boasts high returns and low interest rates for participants; the U.S. non-profit Kiva facilitates philanthropic P2P lending, wherein microentrepreneur clients of “field partners” or local financial institutions in developing countries are paired with those willing to lend at a zero percent return (i.e. indirect P2P). Through nearly a decade of innovations and new players emerging, P2P has slowly become a disruptive force. Total origination remains moderate with some $2.4 billion originated through P2P in the U.S. last year, but growth has recently skyrocketed.The U.S. market is estimated to swell to$32 billion by 2016. By 2025, the global figure could be as much as one trillion.*
Why such fast growth?
> Posted by Ignacio Mas, Independent Consultant
#167671003 / gettyimages.com
I guess it happens in all human endeavors; we sometimes get carried away wishing things were the way we think they ought to be. Let me provide three cautionary observations relating to financial inclusion: about how we measure it, how we talk about it, and how we assess it. The point is not to dampen enthusiasm about the possibilities, but to reflect on our progress in a more realistic way.
Industry Showcases and the Numbers Game
Through numerous industry conferences and blogs, certain players get put up as shining examples for the industry to follow. M-Shwari is perhaps the latest one, I guess because it delivers large customer numbers to an industry that is still largely focused on coverage rather than usage, and it represents the kind of telco-bank partnership that many have been fantasizing about.
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