March 16, 2016
Alternative lending companies almost took over the lending business by storm, leaving few options to major players. Realizing the possible loss in a race for the profitable service, banks have joined hands with alternative lenders and even saw a great opportunity in financially fueling the loans originated by competitors.
While we look at the alternative lending as a whole segment, it actually is a complex ecosystem consisting of eight types of alternative lending businesses.
The best-known type so far is P2P lending. There is a wide range of companies successfully operating in a subsegment to democratize lending. P2P lending is built as a marketplace where individual borrowers take unsecured loans from other individuals. The model allows individuals to access low-cost quick loans at a rate they can afford.
Examples of companies offering P2P loans: Zopa,