Peer-to-Peer-Lending through Crowdlending Platforms: An Analysis of New Investment Opportunities for Private Investors

The increasingly present alternatives to traditional lending are challenging the traditional finance industry. The global credit market cannot afford to ignore the influence of crowdlending. Hence, there must be several benefits for preferring crowdlending instead of applying and investing traditionally. Financing in the middle class is currently changing. The conventional house banks and thus, bank loans as such, will undoubtedly be confronted with more competitors in the future. Historically low-interest rates, stricter Basel regulations, branch and staff cuts in banks, and digitalization in the financial sector are making alternatives increasingly attractive. Given the prevailing circumstances, the question arises why private individuals barely make use of alternative forms of investing and financing, such as crowdlending to diversify their portfolio and to combine different instruments. Despite the benefits of crowdlending, the recent developments have revealed risks which potentially have extensive consequences. One risk, the information asymmetries through crowdlending platforms, has been covered in the transfer module preceding to the bachelor thesis. The results of the transfer module showed that the platforms through their proprietary scoring systems pass on the risk associated with investing in crowdlending loans to the investor. Considering the persistent growth of the industry, it is beneficial to investigate the reasons for the development of crowdlending as there is insufficient research performed on crowdlending in Europe. Therefore, a survey of potential investors was carried out, and representatives of European crowdlending platforms have been interviewed for this work to get a more in-depth insight into the versatile crowdlending industry. It turns out that there is lots of interest in crowdlending and that the current reluctance of potential investors is due to the lack of regulation and education on the subject