IN A financial landscape that ranges from the dreary to the disliked, peer-to-peer lending stands out. P2P firms, also called marketplace lenders, channel loans directly from institutional investors and individuals to borrowers, for a fee. In the process, they have lowered interest rates for many and expanded access to credit. They have been growing pell-mell (see chart), in part because their structure allows them to escape much of the regulation being heaped on banks. But recent months have shown that they are not immune to the burdens that weigh down their conventional rivals.
On the face of things, it is business as usual. Lending Club, the biggest P2P firm, doubled its loan book last year. This year it expects it to grow by 72%, to over $14 billion. Yet its share price has fallen below $9, from a peak last year of $25. That is chiefly due to America’s slowing economy and rising interest rates (although the pace of increases is likely to be slow—see Free exchange). Under such...Continue reading
Source: Business and finance http://ift.tt/1Rl8Yjt
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