Analysis And Successful Factors For P2P Lending Platforms In The European Market

The banking crisis highlights the problems in the current traditional lending models,and a lot of borrowers' needs to stay unfulfilled.Thankfully,the modern digital age comes with numerous innovations within the financial environment.One of these innovations is alternative lending,and this thesis' main research objective is the phenomenon of P2 P lending platforms.P2 P lending is an emerging online application that acts as an intermediary where people can directly borrow money from each other.The alternative lending market that originates from this offers benefits to both borrowers and lenders.The boundaries for this thesis are detailing the best practices for a list of success factors for a startup P2 P lending platform within the European market to become a market leader.The thesis is divided into three main parts,namely the external analysis of P2 P lending,the competitive advantages analysis,and the strategic blueprint.The main theoretical contribution lies in obtaining a comprehensive success theory on the P2 P lending market and platforms.Through a brief introduction of this occurrence,different kinds of P2 P lending are discussed,and the main methods in shaping a strategic blueprint are presented.The first part,the external analysis,is divided into a macro view of the industry,which is described through the viewpoint of a PESTLE analysis.Finally,the market analysis compares different industries globally.The competitive advantages analysis consists of a business overview,a value chain analysis,a business resource view and a business capacity view.These points of view are condensed into the main strategic plan,which is the success factor strategy for startup P2 P lending platforms to become leading in the European Market by adding the results of a questionnaire on P2 P lending.After these analyses,active and passive leading models are presented that would fit P2 P platforms in Europe.Finally,some conclusions and future thoughts are penned down.Sources contain literary reviews,discussions with supervisor Li and experts in the field(Professor John Aikman).A quantitative and qualitative questionnaire has also been conducted to poll the population's awareness and feelings towards P2 P lending platforms.The poll concludes that P2 P lending is still in its infancy stage and that people are generally not aware of it.The perception that they have is a lack of a safeness feeling,unlike what they have with traditional banks.It is up to the strategic plan to instil a change into this negative view.The main theoretical contribution is of the form of a duo of proposed business leading models that give a new perspective on existing models.These two proposed leading models are the active and passive models.The active model is one where lenders can have direct access to borrowers' listings and have complete access to all financial details.They can then bid on these listings and trade them on secondary markets if they please.The passive model takes advantage of the fact that lenders cannot observe all credit scores associated with the borrowers' listing and thus are also swayed by personal information that awakes a form of a social aspect to lending.This opens up a new market for the smaller borrowers that are unserved in the current traditional lending market.