Borrowers switch to P2P lending for home loans
The irresponsible lending practices uncovered by the year-long inquiry by the Royal Commission on big banks seemed to have pushed borrowers to alternative lending providers, the CEO of peer-to-peer loan provider SocietyOne said.
SocietyOne’s Mark Jones told Yahoo Finance that peer-to-peer loans have already gained traction in the industry.
In fact, figures from the Australian Bureau of Statistics show that personal loans’ share of the lending market doubled from 14% to 28% between 2010 and 2018. Meanwhile, data from CommSec reveal that borrowing from non-bank institutions grew 10.3% in August 2018.
“The reality is people trust the big four banks as secure, and they actually trust their local branch manager. They just don’t trust that the banks are going to give them a good deal,” Jones said.
SocietyOne is amongst the non-bank institutions which rode on the trend. Over the last three months to March, it posted around $64.9m in loan originations, significantly higher than the $39.5m it recorded in the same period the previous year.
Jones said alternative lenders found an opportunity to exploit the controversies uncovered by the Royal Commission and sway borrowers.
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Source: Borrowers switch to P2P lending for home loans