The head of a new Australian fintech has said that “quality borrowers” are hitting roadblocks when it comes to sourcing the right loan, but such hindrance can provide “huge gains” for alternative lenders.
Alan Greenstein, the CEO of new fully licensed marketplace lender Zagga, said that there are both “winners and losers” from an “increasingly complex lending market”.
As banks tighten the screws on credit, Mr Greenstein suggested that alternative lenders are improving their market share, but pressure is building on intermediaries to match borrowers with the right loans.
Ahead of the launch of a new discussion paper from the fintech — Reshaping the lending landscape: How are today’s trends influencing tomorrow’s market? — Mr Greenstein warned that the lending landscape is at an “inflection point”.
He explained: “Borrowers are feeling the pressure of tighter credit conditions; banks are balancing the need to meet regulatory requirements with the need to protect profits; more SMEs are opening their eyes to a source of accessible and affordable funding.
“But the cohort that really stands to benefit among this confluence of forces is the intermediaries because borrowers are now more reliant on this group than ever to help navigate the changing conditions.”
The Zagga CEO continued: “This puts the pressure back on the intermediaries to have an in-depth knowledge of the lending landscape. Knowing which funders will look at particular LVRs, locations, special conditions and loan purposes can be the key to writing a loan or not. But the opportunities are there for those willing and able to take them.”
Mr Greenstein said that, against this background, alternative lenders and the investors who fund loans through them, have an “ideal opportunity to meet market demands, provide much-needed capital and support housing supply”.
Zagga’s whitepaper on the lending landscape will be released next week.
Find out more about alternative lending and the opportunities it presents at The Adviser's Bootcamp SME Broker 2017, which will visit four cities starting from 14 November.
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For more information about The Adviser’s Bootcamp SME Broker 2017, supported by our principal partner NAB, visit https://www.bootcampsmebroker.com.au.
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