Borrowing and lending of funds is an essential part of the economy. This is how the money in the economy gets circulated to different sectors and there opens up new opportunities for new fields to develop and for different people to earn. However, if this system becomes stagnant and the money is not transferred then the growth of an economy practically stops. In that case, there can be no new businesses starting up or no new factories opening.
Hence, it is important that lending and borrowing trade continues to function smoothly. And so in order to facilitate this, online lending has been introduced. Since its introduction, this field has registered major growth. New loans have been introduced and a new target audience is has been identified. From plain vanilla loans like consumer loans to other varieties like mortgage and asset loans, online lending is introducing everything on their platform to make things personalized and easy for people.
Now if you want to know, if like the present, the future of this sector is also bright or not, then let’s have a look at it in a little more detail. Come, let’s begin!
What does the future look like for online lending?
As more and more time passes the online lending sector is learning from its experiences and improving its system. As a result, today the sector is performing far better than the traditional banks as far as speed and quickness and ease of approval is concerned. While with the traditional banks there are so many documents and formalities that need to be completed to get the loan, with online banking, things have been simplified for the benefit of the borrower.
According to sources, it has been discovered that online banking is already making more mortgage loans as compared to traditional banks and this trend doesn’t seem to be flattening in the next decade either. In fact, financial experts believe that the online lending trend is only going to get better in the upcoming years, while the banks are probably going to look at even more dwindling market share in the context of the mortgage market. So, basically, it looks like what Bill Gates once said about banks is proving true- “Banking is necessary, banks are not.”
Since 2005, online lending has seen positive growth. It was in 2010, that this industry got $500 million in cumulative originations, and then by 2012, it surpassed $1 B in cumulative originations, while in 2017, the originations recorded were just shy of $40 B. And even now the online lending space that has at present crowded almost every aspect of the market is reported to be evolving for the better. Hence on this basis too, it can be said that the online lending market is heading towards a safe and bright future.
Hence, all in all, it can be concluded that the online lending sector is at staring at a stable future, with new partnerships, deeper investor base, and broader product sets. There might be some hurdles that this sector may find in its way, but according to its past reports, it is going to surpass them all.
