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Alternative Online Lending > Breaking New Ground (Report) > Flashcards

Breaking New Ground (Report) Flashcards

1
Q

U.S.

How much funding was generated through alternative online finance market in 2015?

A

$36.17bn

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2
Q

U.S.

Describe the growth in funding from the online alternative finance market over the past three years.

A

Funding via these lenders reached $36.17bn in 2015, up 213% from the $11.5b in 2014.

The 2014 figure is a 163% increase from the $4.40bn in 2013.

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3
Q

Define:

Alternative finance market

A

Instruments and channels of finance that emerge outside of the regulated banking system in both developed and developing economies.

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4
Q

Define:

Online alternative finance

A

A subset of the alternative finance market.

Specifically, they are technology-enabled online channels or platforms that act as intermediaries in the demand and supply of funding to individuals and businesses outside of the traditional banking system.

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5
Q

How can you distinguish between the various models of online lenders?

A
  1. the source of financing
  2. the use of proceeds provided by the financing
  3. instrument used to provide the financing
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6
Q

Who have taken it upon themselves to develop the taxonomy of alternative finance?

A

University of Cambridge and the Chicago Booth School

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7
Q

Name all the different types of online alternative finance models.

A
  1. Marketplace/P2P Consumer Lending
  2. Balance Sheet Consumer Lending
  3. Marketplace/P2P Business Lending
  4. Balance Sheet Business Lending
  5. Marketplace/P2P Real Estate Lending
  6. Reward-based crowdfunding
  7. Equity-based crowdfunding
  8. Real estate crowdfunding
  9. Donation-based crowdfunding
  10. Invoice trading
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8
Q

Which financing models are growing the fastest?

A

Invoice trading, balance sheet consumer, and marketplace/P2P real estate

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9
Q

U.S. and Canada.

Marketplace/P2P Consumer lending accounts for what percent of the overall online alternative lending market?

A

69%

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10
Q

Latin America and the Caribbean.

What drives the online lending market there? What share of their total market does this segment represent.

A

Marketplace/P2P business lending represents the largest share of the Latin American online alternative finance market.

56% of total

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11
Q

What factors (9) likely explain the success and proliferation of online alternative lending platforms in some regions over other?

A

Successful regions include those that:

  1. High comfort with online retail and e-commerce activities
  2. High smart-phone penetration
  3. Early adoption of alternative finance models
  4. investment climate that funds and supports technological innovation
  5. A culture of innovation in the financial services sector.
  6. Strong adoption of online/mobile banking
  7. Dissatisfaction with traditional banks
  8. Pent-up demand from unbanked and underbanked consumers and businesses
  9. A generally supportive political and regulatory environment.
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12
Q

In the US, where are most plaform lenders concentrated?

A

West and East

Mainly California and New York

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13
Q

U.S.

Growth in alt business financing over three years to 2015.

A

147%

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14
Q

U.S. alt business financing volumes in last three yrs…

A

$6.88bn in 2015, up from

$2.8bn in 2014, up from

$1.15bn in 2013

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15
Q

U.S. alt business lending model volumes in 2015?

Break it down by P2P and BS lenders…

A

$5.6bn in 2015

Of that, marketplace/P2P lenders accounted for the majority, posting volumes of $2.55bn in 2015.

BS lenders follow, having provided $2.25bn in 2015.

Invoice trading acct for $31.88m in 2015, but experienced the fastest growth of all.

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16
Q

What industries in the US are the biggest users of online alternative lending platforms?

A
  1. Construction
  2. Finance
  3. Business & professional services
  4. Technology
  5. Retail & wholesale
17
Q

The US online marketplace caters predominantly to what segment?

A

Personal and consumer lending

18
Q

What makes the US different from other countries in terms of the make up in lending from online marketplaces?

A

Countries in Europe, Latin America and Asia Pacific region have marketplaces that are predominantly focused on business lending.

19
Q

How much financing was provided to consumers in 2015 via online lending platforms in the US? Both segments…?

A

$28.8bn total loans in 2015

$25.7bn came from marketplace/p2p lenders

$3.07bn came from balance sheet lenders

20
Q

How much traditional credit was extended to consumers in 2015, according to the Federal Reserve consumer outflow data.

A

$230bn

21
Q

What share of traditional credit creation do online lenders represent. How has that changed over the last three years.

A

12.5% in 2015

Up from 3.8% in 2014

Up from 1.65% in 2013

22
Q

What makes the US different from other countries in terms of the make up of investors in online marketplaces?

A

The dominance of institutional investors.

Outside the US, marketplace/p2p models have higher proportions of individual lenders (retail investors)

23
Q

In 2015, SME borrowers raised an average of $____ per business loan, funded by an average of # ____ investors.

A

$86k

16 investors

24
Q

Balance sheet business lending increased from the $____ in 2014 by 102% to reach $_____ in 2015.

A

$1.11bn

$2.25bn

25
Q

Balance sheet business borrowers raised an average of $____ per loan via this model.

A

$48K

26
Q

The average loan size of marketplace/p2p real estate lending was $_____ in 2015.

A

$405k

27
Q

Equity-based crowdfunding grew by 117% to reach $____ in 2015 from a base of $_____ in 2014. Fundraisers raised an average of $_____ per equity-based crowdfunding campaign, funded on average by #____ investors.

A

$590million

$270million

$960k

38 investors

28
Q

Real estate crowdfunding in the US grew from $134 million in 2014 to a record $____ in 2015. For this model, the average number of investors per deal was #_____.

A

$470million

66 investors

29
Q

Online alternative finance platforms in the US are subject to federal laws covering _____, ______, and _______.

A

Credit, privacy, and money laundering.

30
Q

When was the JOBS Act signed into law?

A

2012

31
Q

When was Title III approved?

A

2015

32
Q

Why is Title III critical to crowdfunding startups?

A

It allows both accredited and non-accredited investors to invest through platforms.

Alternative Online Lending (4 decks)

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