It seems that everyone wants to join our sector of crowdfunding. Two of the world's leading investment banks are looking at a move into the fast expanding peer-to-peer (P2P) lending sector, also known as marketplace lending, and the space inhabited by Money&Co.
Societe Generale and Goldman Sachs, prominent financial institutions both, are racing to embrace technology to disrupt traditional finance. The Financial Times reports (subscription required) that they are among several banks discussing a plan to back Aztec Money, an emerging P2P financing platform that has created an online market place where people can bid for company invoices. The article reports that "their involvement will disappoint purists, who have trumpeted the nascent P2P industry as a democratic innovation with the power to usurp a discredited banking industry".
Another FT article on the democratisation of finance relates how technology has been able to improve access for the masses. The piece argues that only a few banks are thinking radically about technology and finance, using big data to analyse customer behaviour, for example, or partnering with P2P lenders: "It is the broadening and deepening of the crowdfunded debt market that has been one of the most striking trends of recent years. From Shanghai to London to New York peer-to-peer lenders, online platforms that match people looking to invest money with individuals and companies that want to borrow it, are doubling or tripling in size every few months."
The FT also reports that a bundle of P2P consumer loans has been given a credit rating by Moody's, the first time a major rating agency has evaluated a securitisation deal created by the fast-growing P2P lending sector. The piece reports that achieving such a credit rating is a major win for the nascent peer-to-peer, or marketplace lending, sector as it seeks to expand by tapping new types of investors.
*** Check out the marketplace for P2P loans. New offerings are in the pipeline, but lenders can purchase exisitng loans from other registered lenders. Pleas bear in mind that lending carries risk. See the risk warnings on our Home page, and read more on risk in our Frequently Asked Questions section.