Peer to Peer continues global expansion
News reaches us that yet more countries will soon start seeing the benefits of peer-to-peer lending on their local economies.
Firstly in Dubai, a major financial hub in the Middle East, where online lending platform Beehive launched earlier this month. New chairman Rick Pudner points out that Small to Medium Enterprises represent 90% of all businesses in the United Arab Emirates, but only around 4% of bank loans, with around 50-70% of SME loans being rejected by banks.
Beehive is aiming to reverse that situation, offering investment between AED100,000 to AED500,000 (£17,130 – £85,643) to established businesses with funding usually arriving within 7 days of application. Investors on the other hand can expect to receive monthly returns of 8-12%. Focusing on transparency as the key to success in the marketplace, Beehive is hopeful that it’s platform will drive economic growth and employment in the region.
Meanwhile, over the water in Australia, traditional banks may be getting a little hot under the collar soon as regulators begin to relax their grip on peer-to-peer there. Australia’s four main banks Westpac, ANZ, NAB and Commonwealth Bank account for 80% of all loans there, with peer-to-peer representing a miniscule 0.00001% of total lending. However Westpac has recently invested AU$5m in a P2P service called Society One through its venture capital arm, so it clearly knows which way the wind is blowing.
Although P2P in Australia has obviously got a long, long way to go before it is anywhere near the levels of the UK or USA, we’ve seen repeatedly how fast it can grow once regulation allows it room to breathe, and when people and SMEs become aware of it. The next step for Australian players will be to convince people of the safety and potential returns of P2P, so we expect to hear more news from over there in the coming months.
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