Ya know, you get up every morning and read things that seem to be a surprise to people. Online lending marketplaces are seeing loan defaults rise. Wow! Duh! They make riskier loans that the banks could not make (Dodd Frank) and they are experiencing defaults climbing. Not the end, but problems arising.
As in any new business, there will be growth problems, as the online lending sector of fintech is now seeing. Obviously there has been a rush to grow quickly and some of the underwriting of new loans was done in a rush to gain a large footprint quickly. As these delinquencies and defaults rise there will certainly be some pain and some of these new online lenders will cease to be, or will be absorbed by others. Consolidation is a natural progression in newly formed industries and fintech is no exception. The need for these firms is solid and should not change the long term prospects.
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Posted by Bill Taylor/CEO-FintekNews
Source: Pymnts.com