Home > Uncategorized > Lord Adair no longer trashing peer to peer lenders?

Lord Adair no longer trashing peer to peer lenders?

 

As reported here 

Earlier this year I posted that his comments at that time were hard to take given his background and his industry’s failures but he has gone on to make some pertinent points of which the following stood out for me

The former regulator said much of the talk around fintech is “hype” and said peer-to-peer lending’s approach to underwriting loans was not that different.

He said: “Credit assessment is not radically different in approach to that already deployed by the incumbent banks.

“This hierarchy of different credit approaches has been in place for many years, and I am not convinced that the growth of direct non-bank lending or the use of information technology by challenger banks will radically change it

So very true. Credit is credit and anyone who believes they have unearthed some unconsidered approach is kidding themselves. Rather like the tipster who has a “new system” for backing horses, such beliefs express nothing more than nativity. In fact just as with backing horses, credit takes into account a hug range of factors which all need to be weighted and considered

If I was to draw a distinction between ptp lenders and the established industry it is that one asks too few questions, relies too heavily on numbers and is quick. The other asks far too many questions and is slow

Both are guilty of a tick box mentality and with both a loan and invoice financing in last two weeks I have had lenders turn down excellent opportunities (now placed elsewhere) simply because they couldn’t or wouldn’t grasp the overall picture

The ideal lender is quick, has a firm grasp of the overall picture and makes an effort to understand the business whilst respecting a degree of privacy

And it’s not at all bleak. I would suggest that there are a number of invoice finance lenders who do adequately fit that criteria

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