How P2P Platforms Have Benefited From COVID-19?
These unexpected circumstances have not left everyone in doubt. There is a segment of investors who are happy during this lockdown time; stock market investors and P2P investors. COVID-19 has brought economic concerns in the world. But that’s not the worry since, it has generated innumerable opportunities, not just for P2P platforms but for P2P investors too.
Diversification is the key
Spreading investors’ portfolio across hundreds and thousands of loans is essential and this aids advantage as different products and borrowers perform differently during an economic crisis. This concept helped protecting the ultimate interest of the investors and so that their returns. Though returns on investments have taken a hit across most asset-class, investments in P2P lending, continue to hold ground. Platforms that are compliant with the regulations have a sensible underwriting mechanism, established business practices, sound and secure tech-stack and an efficient workforce which will surely emerge stronger on the other side of this trial.
P2P lending was rose to be resilient to economic turmoil and a good investment with stable returns. The pandemic is an important moment for the industry, to prove that money-lending offers solid financial returns when it is made through the right platform.
Modernistic FinTech Approach and Transparency to the Rescue
While initiatives and processes were being implemented to ensure that the demand and collection side of the business works smoothly, supply has not been a real concern. Investors continue to add money to their escrow account and fund online loans. This was all because of the highest level of the transparency maintained on the platform. The investors are aware of the collections of money, their returns and delayed borrowers. The confidence imposed by investors and partners is encouraging during such a difficult time. The modern fintech approach aka digital focus helped the platform continue all operations during this pandemic time without difficulties. E-verification where geo-tagging, location mapping, video interviews and selfies are used, instead of physical verification of borrowers is a time saving, cost-efficient and contact-less process that is here to stay. The advantage of P2P lending over conventional financial institutions is that it does not require any physical interaction. Especially, during such times it is extremely considerate and advantageous for the customers to take into account P2P lending option.
This is where the new-age fintech took advantage of the resources and time they had invested in developing an online infrastructure. P2P lending has adopted digital models such as e-signature, e-verification, e-mandate, API based data integration, blockchain and machine learning to create an ecosystem that enables fully contactless financial transactions. It is likely to rise faster than most in the post-COVID-19 era. The aim is to celebrate and encourage responsible debt management practices that will enable borrowers to access fast and low-cost credit even in the post-COVID-19 era from the digital investors Then the debt will be truly democratised.