Softer Investor Demand Dialing Back Fintech Lenders’ Marketing

According to a recent Wall Street Journal article, pressures from quality control and regulation have forced online lenders to scale back their efforts to attract new borrowers.

This is a big shift for these rapidly growing financial technology companies, the Wall Street Journal stated, some of which do not lend themselves but instead match borrowers with investors who effectively fund loans by buying them. Investors are growing more concerned that loans will sour more quickly than expected and that regulation could hamper the industry. Amid the growing skepticism, lenders have started redoubling efforts to find new buyers while others are slowing down their business.

According to the article, the volume of securitizations backed by online loans slowed sharply since the start of the year. In the first quarter, $1.5 billion worth of online loan pools were sold, down 21 percent from the $1.9 billion sold in the fourth quarter of 2015, according to PeerIQ data.

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