The alternative lending industry has exploded globally in the past ten years thanks to fintech. In Australia, for example, it is growing at a fast pace, primarily due to the increased preferences for business owners to secure fast, convenient, and affordable capital for their businesses. The industry’s growth in the country has attracted new alternative lending businesses and increased the kinds of alternative financing products available. An evaluation of the alternative lending industry in the country reveals that there is a major awakening observed with a particular emphasis on ensuring faster, convenient, and reliable services for customers. Here is an overview of what to expect of the alternative lending sector in Australia.
The otherwise referred to as alternative lending concept in the country is expected to become not so alternative, even as the industry achieves much preference among customers. According to an evaluation by KPMG in 2018, Australia is only next to China as the largest alternative finance market within the Asian-Pacific region. The industry, valued at over $1 billion in 2017, has achieved tremendous growth with an emphasis on absorbing fintech technologies to make funding highly accessible and readily available for customers.
Reduced Demand for Security
The drop in property prices in the country is pushing more small business owners to find it difficult to use their homes as collateral for alternative funding. The decline in property prices implies that business owners cannot sufficiently use their homes as equity to obtain loans. This is pushing business owners to consider pursuing other forms of unsecured funding. It is also boosting alternative lenders’ willingness to offer unsecured financial services.
The increased demand for alternative lending services in the country has put more enterprises into the business world. The increased competition is pushing more lenders to think of ways of diversifying their financial services to customers. Customers, on the other hand, are also thinking of ways of using the alternative lending industry to finance their diverse ambitions. The industry is, therefore, growing quickly as defined by diversity in the kinds of products and services offered as well as the drive for demand.
Increased Call for Transparency
From an ethical and regulatory point of view, transparency in the financial sector is a major aspect. The alternative lending industry in Australia is adapting by upholding disclosure standards on important aspects, such as financial positions and financial transactions.