Given its ability to provide underserved borrowers with access to affordable credit for the first time, it is perhaps no surprise that we are seeing the greatest leaps forward in P2P lending in large, low GDP per capita countries like China and India. We recently caught up with the CEO of Indian P2P lending marketplace Faircent, Rajat Gandhi, who spoke to us about what he sees as being the future of P2P:
What is the greatest opportunity that you see facing Faircent in 2016?
We at Faircent have already started seeing significant interest from institutional lenders trading on the platform. Apart from this, with India witnessing a drop in interest rates we feel this could help in transition of investors from banks to P2P lending websites in search for better returns on their investments. Another area we see great opportunity is in funding Micro SMEs which have been underserved by the existing banks and financial institutions.
What has triggered the increased global interest in P2P lending?
There is a strong demand for alternative financing and investment but limited supply and opportunity. These large, unfulfilled credit needs of small businesses and consumers and the lack of bank’s focus on this lending deficiency, created a fertile ground for P2P to flourish. Moreover quick turnaround time back by advanced technologies for credit scoring and online verification has provided further impetus to P2P lending.
How can established banks best benefit from innovation in P2P?
Banks and other financial institutions have now begun to realize that is there is no running away from technology and they are being forced to change their backdated operational models. We operate in a space which has capacity for multi-players to co-exist and thus partnering with P2P platforms would benefit these financial institutions in the form of better access to capital with lower cost, better transparency and compliance.
Why is Asia such a great market for opportunities in finch?
Most of Asia is part of the emerging markets and in emerging markets credit has been in short supply for both businesses and individuals. The credit appraisal systems have been based on collaterals which most businesses are unable to provide. P2P platforms with their innovative credit appraisal systems have empowered large underserved borrowers to access credit and at much lower costs. In markets like China the P2P lending platforms have flourished due to the presence of large scale shadow banking, it seems has shifted on to P2P platforms.
Who is your fintech or startup industry hero?
I have always had a great respect for Elon Musk who has done pioneering work in FinTech through Paypal. Which changed the face of payments worldwide.
Rajat Gandhi will be joining us to speak at Future Bank Asia on 20th-21st April. To hear from the man himself register now for your ticket to attend.