Why is alternative lending — the leader of investors in fintech?
The SHIFT.cash platform is a project in the field of alternative lending. As a basis, we took the least risky business model (secured lending), available to a wide range of people in the world (a personal vehicle being the collateral) and reinforced it all with innovative technologies (blockchain, automation of all processes, etc.). As a result, we received a safe, but profitable product for investors, which, we are sure, will be in demand.
Analysts also note that alternative lending is a favorite among investors compared to other fintehs. For example, according to CB Insights, at the beginning of 2017, $ 18 billion was invested in this direction against $ 10–11 billion in such sectors as electronic payments, transfers, acquiring.
Why is the investment demand for projects in the sphere of alternative lending so high?
First, from an investor’s perspective, the lending segment is the most understandable and transparent. The investor issues a loan and after a certain period of time gets the money back with interest. Many modern platforms, including ours, allow the investor to fully control the online status of his loan, which further increases confidence in the industry. The more investors, the greater the amount of investment is obtained in the aggregate. The access of the system to global investments allows creating more attractive conditions on the platform for borrowers, and the more borrowers the more interesting are the conditions for investors.
The second most developed direction of fintech are payment systems. But the margins of projects are significantly lower than in the lending segment, so interest in this direction is only from the side of large investors. In addition, there are a lot of similar payment systems, and it is increasingly difficult for new projects to compete with players already familiar with the market. In lending, by the way, there are a lot of similar platforms. Take, for example, projects in the sphere of microloans to paychecks or classical P2P-crediting platforms.
Promising in this sense are niche platforms that target a fairly narrow audience or offer new formats to the market. We also went along this path. SHIFT.cash will be the first platform specializing in lending secured by a car based on blockchain. Blockchain and smart contracts, in addition to a high level of security, provide another important advantage for the alternative lending segment. They allow creating cross-border credit platforms, which opens up new opportunities for investors. After all, now such a loan is available to people from anywhere in the world, including from countries where alternative lending may be more in demand than in the investor’s home country.
