P2P-lending in 2020: Survival of the toughest

Asia has seen a surge in P2P-lending—in investors, borrowers, as well as start-ups. But then coronavirus happened and it changed everything. A common occurrence across most P2P platforms has been an increase in borrowers defaulting on loans. This was due to the outbreak, nationwide lockdowns, extreme changes in people’s livelihoods, and uncertain economic futures.

These are the signs of trying times for P2P platforms, especially for those who are new to the business.

Dima Djani, the CEO of P2P lender ALAMI, says this is “natural selection”.

“This is a test. Those [who] come out unscathed will be the champions in a more saturated P2P landscape going forward.”

The Asian P2P-lending market’s impressive growth has come to a standstill in 2020.

It’s estimated that about 70% of P2P companies based in India will struggle. The rest are well established and will probably maintain the cash flow needed to stay afloat.

In India alone there are close to 500 online lending start-ups, and in Indonesia there are about 160; many of which are backed by funding from Chinese companies.

Europe’s P2P landscape looking brighter

On the other hand, Europe’s P2P-lending platforms seem to be starting the recovering journey, as investors regain their confidence in the lenders, especially those who could withstand the chaos:

“In May, the share of platforms which increased volumes of funded loans grew to 43.2% and the total financing amount on European platforms increased by 33.6% last month compared to April.”

This increasing demand for online loans is a light at the end of the tunnel for P2P platforms.

Robocash analysts believe the rise in popularity will continue across the continent as investors regain trust in the platforms that managed to navigate the challenging times. These platforms can definitely look forward to a brighter future.

Banks look at acquiring P2P-lending platforms

Financial banks’ light bulb moment: Seeing the value in P2P-lending.

Advisory experts predict that banks might be looking to acquire P2P platforms that operate successfully throughout the current economic crisis. Due to the technological upper hand of P2P platforms, banks might deem them as an opportunity to bolster their own lending schemes.

 “It might be an attractive proposition for banks to acquire platforms and use their technology and efficient lending capabilities to drive their growth in lending,” said Frank Wessely, a partner at advisory firm Quantuma.

This could lead to takeovers or even unprecedented partnerships between banks and P2P platforms.

Coronavirus accelerating eSports and P2P sports betting popularity

Online sports betting takes the lead in 2020.

The world of eSports has been showing strong and steady growth over the last couple of years, but this year, they might score their biggest goal yet. Due to the lack of traditional, physical sports in 2020—a result of social distancing and public health measures—the eSports world has been experiencing accelerated growth:

“It is anticipated that global eSports revenues will be in excess of €1 billion this year, with China being the leading market,” according to an article on oxfordbusinessgroup.com

Due to lockdown measures, most traditional sports were cancelled, giving eSports the opportunity to bring in more fans and loyal users, with close to zero competition from physical sports.

Online sports betting also on the rise

The same can be said for online sports betting. They go hand-in-hand with eSports, so it’s only natural that they share in the same growth. With the accelerated popularity of eSports, lockdown regulations in place and sports betters having nowhere to go but online, the sports betting industry has hit the jackpot.

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