Web: Fintech Lending Booms. Is That a Good Thing?
September 2018 by: From The Web
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Fintech lending has grown fastest in countries with higher income, less competitive banking sectors, and loose financial regulation, the Bank of International Settlements has found in a new report.
But the biggest findings in the report are what the BIS, the bank for central banks, doesn’t know: How fintech has affected borrowers, lenders, financial stability, and the economy.
Because “the resilience of new fintech credit processes and firms has not yet been tested over a full economic and credit cycle,” the report points out, “hence, it is not clear how fintech credit will perform when conditions deteriorate.”Growth in what was arguably the world’s frothiest and most dangerous fintech lending market, China, has slowed recently as a result of a government crackdown. That government action, however, didn’t come until the perils of extremely risky peer-to-peer lending products being marketed as deposit-like securities became clear.
Retail investors have lost tens of billions of dollars in recent years, sparking anger and attempts at public protest.
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