I have to admit: investing in peer to peer loans didn’t initially appeal to me.
I thought it would be hard to assess the risk in lending to individuals — after all, that’s what banks get paid the big bucks for, right?
But 5 years after Lending Club first launched its website, the firm has pioneered a whole industry, not just to say a new asset class. There have been over $1B in p2p loans underwritten and investors like me are now using p2p loans as a core holding in the fixed income part of their portfolios.
Founder Renaud Laplanche joins me on Tradestreaming Radio to talk about how the p2p loan industry cures some major inefficiencies in the market for capital, does a better job sizing up and personalizing risk, and how his firm and industry might just eat the banking system’s future lunch.