Both P2P loans and technology are introducing revolutionary products and tools for better access to funding for underbanked people around the world. For countries part of the Association of Southeast Asian Nations, this brings hope, as there are more than one billion underbanked or unbanked people in the whole of Asia, many of whom ASEAN, who will get easier access to financial services with the rise of P2P lending.
P2P lending and micro-financing will improve the financial status of many people in Asia
One of the signature traits of P2P lending is that the process excludes the middleman, which significantly decreases the cost of the service, making it available for more people, even from lower social backgrounds. This is extremely important for people in the ASEAN region, as even though the region is experiencing great economic advances, many people are still categorized as unbanked.
Platforms like AssetStream offer their customers the opportunity to build their credit history on site, which is one of the biggest benefits for underbanked people. It allows unbanked people to start borrowing small amounts of money, and thus build their credit history over time.
Micro-financing also allows ASEAN investors to boost their earnings with local currencies, and a large pool of local borrowers. AssetStream offers a credit rating badge system, which allows lenders to chose borrowers with outstanding history on the platform. Thus, the platform is making it possible for both borrowers and lenders in the ASEAN region to securely get access to funding and lending.
How does technology advance P2P lending?
Recent developments in technology are the main reason why P2P lending is becoming available to a large number of people globally, not only in the ASEAN region.
AssetStream and similar lending platforms are based on blockchain which provides fast-processing of transactions and security, all in one. As the platform utilises the Stellar Consensus Protocol, it allows transactions to take place in a matter of seconds.
As blockchain operates smart contracts, this means that all agreements between borrowers and lenders are secured, as no one except the two sides on a contract can access and change the terms and conditions of the contract.
What is especially beneficial for ASEAN borrowers and lenders is the availability of contracts from all over the world – P2P lending platforms are global as all processes are performed online, which means that users benefit from worldwide financial stability, and not rely solely on the economy of their own country.
P2P lending and technology are bringing a revolution in financing worldwide, but ASEA is one of the highly impacted regions
Unbanked and underbanked people in the ASEAN region now have a ray of hope for improving their finances without having to go through banks. Thanks to P2P platforms and technological advances they now have access to a number of non banking options to start building their credit history or even start investing the capital they already have.