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Bill Ullman, special advisor to FinTech Collective and CCO of Orchard, posts an excellent read about the current state of the consumer unsecured online market in the U.S. As annual and monthly performance continues to wane with lower IR and increased charge-offs, lenders will need to improve business models and diversify capital to stay competitive versus other alternatives for institutional investors.
2017 is shaping up to be another exciting and challenging year in online lending. As technology gets better, faster, and cheaper and the experience for borrowers improves apace, independent online lenders will continue to face challenges relating to business models, cost of capital, and asset class diversification. But in the end, the data from the Orchard US Consumer Online Lending Index (and other Orchard indexes yet to be launched) will continue to tell us whether the industry rises to meet these challenges or muddles along with weak relative and absolute returns to investors.
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