Many residents of the United States may not realize just how different the lending process is in other parts of the world. Not to say one process may be better than the other; but it may be in the interest of the Western world to start paying attention to those moving ahead of the status quo. The biggest variation from what those in the States may feel is common practice is the change that has occurred in China, India, and Southeast Asia. “Over the last 5-10 years, [they] have leapfrogged from a cash-based society to one where mobile payments are common currency, skipping adoption of credit cards, savings accounts and other consumer financial products...” These practices, of course, have heavily affected credit history, and therefore created a need for alternative means of assessing creditworthiness.
In their recent article, Forbes lays out an example of China’s answer to this new-found change in lending and how successful the shift has been. China’s peer-to-peer (P2P) lending is just as it sounds, “a marketplace for non-bank investors to lend their money to borrowers;” and has 2,200 P2P lenders, with a market valued at an estimated $100 billion. And, with China working out the kinks in this new lending process (a Ponzi scheme was discovered in one of the industry’s largest lenders; which led to Chinese government regulations) is it possible that North American markets could see this new way of lending in their future? Sound off on your thoughts in the comments!
Read the full Forbes article here: Here's Everything You Should Know About Alternative Lending In Asia