Online Networks
Person-to-Person Lending
Most consumers and businessess are part of online networks, which they reach out to for a variety of reasons. But here is one category that looks very interesting. Online lending networks that match individual lenders and borrowers. When traditional lenders tighten credit standards and raise fees, small businesses and entrepreneurs seem to be turning to "person to person" (yet another P2P), lending networks to help keep their businesses going. While these unsecured loans are tiny (usually less than $ 25000), borrowers say they are able to get loans more quickly and with less paperwork than at a bank.
According to the Wall Street Journal, person-to-person lending is a small but fast growing corner of the Web economy. New sites are jumping in (names like Virgin MoneyUSA, majority owned by Sir Richard Branson's Virgin Group), and roughly $ 100 Million in new P-to-P loans was issued in the US last year, a number that is expected to jump ten fold by 2010 !! (according to Online Banking Report). Seems like larger financial institutions are beginning to take notice of P-to-P lending, in the hope that offering loans through such sites could be a way to bring in more deposits and reach more customers. Individual who are lending through these networks see these loans as an alternative asset class of investment that can earn them better returns than traditional investments such as stocks and bonds, and are also attracted by the chance to help out real people.
Am wondering whether such a network could play a useful role in the growth of the India healthcare market. It is common knowledge that India needs to add close to a million hospital beds over the next 10 years, involving investments of between $ 40-80 Billion. A significant portion of this money is expected to be raised from traditional sources, by enterprises that have built up consolidated businesses (either ground up, or through acquisitions). But typically, the healthcare segment is dominated by medium to small businesses, for many of who, borrowing from traditional sources has always been a challenge. Can P-to-P lending provide them with an alternate access to capital, even as they match pace with larger enterprises in the hyper growth healthcare market?
Most consumers and businessess are part of online networks, which they reach out to for a variety of reasons. But here is one category that looks very interesting. Online lending networks that match individual lenders and borrowers. When traditional lenders tighten credit standards and raise fees, small businesses and entrepreneurs seem to be turning to "person to person" (yet another P2P), lending networks to help keep their businesses going. While these unsecured loans are tiny (usually less than $ 25000), borrowers say they are able to get loans more quickly and with less paperwork than at a bank.
According to the Wall Street Journal, person-to-person lending is a small but fast growing corner of the Web economy. New sites are jumping in (names like Virgin MoneyUSA, majority owned by Sir Richard Branson's Virgin Group), and roughly $ 100 Million in new P-to-P loans was issued in the US last year, a number that is expected to jump ten fold by 2010 !! (according to Online Banking Report). Seems like larger financial institutions are beginning to take notice of P-to-P lending, in the hope that offering loans through such sites could be a way to bring in more deposits and reach more customers. Individual who are lending through these networks see these loans as an alternative asset class of investment that can earn them better returns than traditional investments such as stocks and bonds, and are also attracted by the chance to help out real people.
Am wondering whether such a network could play a useful role in the growth of the India healthcare market. It is common knowledge that India needs to add close to a million hospital beds over the next 10 years, involving investments of between $ 40-80 Billion. A significant portion of this money is expected to be raised from traditional sources, by enterprises that have built up consolidated businesses (either ground up, or through acquisitions). But typically, the healthcare segment is dominated by medium to small businesses, for many of who, borrowing from traditional sources has always been a challenge. Can P-to-P lending provide them with an alternate access to capital, even as they match pace with larger enterprises in the hyper growth healthcare market?
posted by Srivathsan @ 9:45 PM
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