Our good friend Ron Suber, President of P2P lender Prosper marketplace was just down in Australia giving a speech, and now we know why. Apparently the "Land Down Under" is a hotbed of P2P activity, and The Sydney Morning Herald is reporting that credit card applications there have fallen 4% during a recent period while personal loan applications rose by nearly 14% during the same time period, fueled in large part by new P2P lending platforms. The statistics were compiled by Equifax. More compelling evidence that peer-to-peer lending is here to stay and gaining traction worldwide. (Cindy Taylor, Publisher)
"Credit card applications fell by almost 4 per cent in the March 2017 quarter compared with the same quarter last year, the latest report on consumer credit by credit bureau Equifax shows. That's the biggest fall since September 2012 quarter.
Personal loan applications rose by 13.5 per cent over the same period, the biggest increase since the March 2005 quarter. The latest period of sustained growth in personal loan applications started in the second half of 2015.
Equifax, which recently changed its name from Veda, holds the largest number of credit records on individuals and its figures are consistent with trends in official data.
Reserve Bank figures suggest that more frequent but lower value transactions are being made on credit cards.
Angus Luffman, the senior general manager of consumer products at Equifax, said credit cards were being used more for everyday transactions but it was likely that consumers were increasingly using personal loans for higher value household purchases.
"The growth in personal loans has, in large part, been driven by newer lenders who cater to
consumers' increasing demand for an online experience," Mr Luffman said.
He was referring to the growth in P2P lenders, also called online marketplace lending, which is still small but growing quickly.
These new players use "risk-based pricing". Just as insurers offer discounts based on the customer's risk profile, so too do P2P lenders offer lower rates to borrowers with the best credit scores..."
Source: The Sydney Morning Herald