PEER-TO-PEER LENDING IN AUSTRALIA.docx - Running head PEER-TO-PEER LENDING IN AUSTRALIA Peer-to-Peer Lending in Australia Name Institute 1 PEER-TO-PEER

PEER-TO-PEER LENDING IN AUSTRALIA.docx - Running head...

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Running head: PEER-TO-PEER LENDING IN AUSTRALIA 1 Peer-to-Peer Lending in Australia Name Institute
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PEER-TO-PEER LENDING IN AUSTRALIA 2 Executive summary New businesses are being established in Australia that utilize communication technologies and information to facilitate economic activities between small businesses and individuals. This is revolutionizing the way services are provided in Australia whereby the sharing economy has significantly grown over recent years. Sharing economy has been prevalent in household goods sharing and peer-to-peer lending. The continued entrance of these businesses into the Australian market is creating competitive pressures on the business models of the existing traditional businesses. This report provides comprehensive insights in response to peer- to-peer lending in Australia. The report begins by analyzing the conceptual meaning of sharing economy and along with this, the corporate model used by traditional banks alongside an assessment of the marketing and business model used by SocietyOne, a leading peer-to-peer lender in Australia. The report identifies the competitive advantages that SocietyOne has over other the traditional banks and the differences in operating models. The report also highlights the unintended consequences of peer-to-peer lending as sharing economy continues being part of the global internet and application developments. Introduction The peer-to-peer lending has been an emerging trend in Australia and these collaborative businesses are revolutionizing the way lending is being facilitated. Peer-to-peer lending is also referred to as marketplace lending, and it signifies a broader term reflecting funds from institutions and retail investors. This form of lending involves borrowing of funds from investors rather than directly from a lender or bank. The P2P Company acts as an intermediary. In Australia, peer-to-peer lending has claimed a significant part of the market share that was previously dominated by banks. With their interest rates being friendly for borrowers, they are
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PEER-TO-PEER LENDING IN AUSTRALIA 3 becoming popular as they connect individuals looking to borrow, with people seeking to invest and they take a fee for the services. Collaborative businesses Collaborative businesses are also referred to as sharing economy businesses and they are economic systems that enable people to rent or borrow assets or resources owned by someone else. The main aims are collaboration and sharing with technological facilitation. These businesses usually use disruptive technologies and distributed networks, creating a shift in value between businesses and consumers and consequently advocating for sustainability (Heinrichs, 2013, pg. 228). A collaborative economy is advantageous as it delivers social, economic and environmental benefits. For instance, there are new opportunities for businesses and consumers and this creates job opportunities and generates economic growth (Meagan, 2018, par 2). The sharing economy has brought about major economic changes. It has effectively balanced supply
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  • Fall '16
  • Kamau Ndungu

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