How Market Place Lenders Are Filling a Niche

The video discusses the evolution and challenges of marketplace lending, focusing on companies like Lending Club. It highlights the sector's growth due to filling niches left by banks and the increasing dependence on institutional credit markets. The need for transparency and adaptation to capital markets is emphasized, with specific issues faced by Lending Club, such as disclosure problems and CEO changes. The future of marketplace lending involves adapting to volatile capital markets and diversifying funding sources.

What niche do marketplace lending companies like Lending Club fill?

• Competing directly with traditional banks

• Providing loans to large corporations

• Filling gaps left by traditional banks due to regulation

• Offering high-interest loans to individuals

What is a major challenge faced by Lending Club as it grows?

• Lack of customer interest

• Dependence on institutional credit markets

• Increased competition from banks

• Decreasing interest rates

How is the marketplace lending model expected to evolve?

• It will be replaced by traditional banking

• It will adapt to capital market conventions

• It will focus solely on small investors

• It will remain unchanged

What common issue might other marketplace lenders face?

• Lack of technological innovation

• Similar problems with transparency and disclosure

• Excessive government regulation

• Over-reliance on small investors

Why is it important for marketplace lenders to diversify their funding sources?

• To increase their profit margins

• To comply with government regulations

• To reduce dependency on volatile capital markets

• To attract more small investors