How P2P lending is reshaping the loan industry

Loans from traditional financial institutions require many stringent criteria to be met. Lending is also an expensive activity, especially for smaller loans, for traditional institutions due to regulatory demands and vast amount of overhead these institutions are subject to.  Hence, loans often create a chicken and egg scenario where Small and Medium Enterprises (SMEs) need to meet certain requirements to get financing, but ironically they need financing in order to fulfil these requirements.

This is where Peer-to-Peer (P2P) lending steps in.