The potential of P2P lending on the Danish market

Will Generation Z take charge in utilizing the potential of Peer-to-peer lending on the Danish market, as an alternative to traditional financial products?

Traditional ways of finance are losing their monopoly; one particular disruption is the concept of crowdfunding (Smidstrup, 2016).  A spin off of the Sharing Economy, crowdfunding is in positive growth globally.  While crowdfunding is typically associated with start-up companies, this report seeks to focus only on one area of crowdfunding that is on a positive trend in its own right, that is P2P lending.  Whilst P2P lending is growing rapidly in the USA, the UK and several areas of Europe; including Switzerland and Germany, it is still in its infancy stage in Denmark.

Generation Z is the generation that has been brought up in a society greatly affected by the financial crisis of 2008, a causal effect being their skepticism of the financial sector.  This is confounded by the lack of focus on personal relationship by financial institutions in their attempts to offer digital solutions to this generation of digital natives. Whilst this generation is described as self-educating and in want of the convenience that digital solutions provide, at the same time, the financial sector is unfamiliar to this generation.

At the same time, from both our focus groups and interviews with the CEO’s of the two CF companies it is evident that there is a general lack of awareness of the concept of Crowdfunding.  However, according to their financial situation it would appear that they have the means to invest in marketing campaigns in order to increase awareness.

The project finds that Generation Z priorities P2P lending over quick loans.  In considering the substantial growth of quick loans on the Danish market, this would indicate a strong potential for P2P lending on the Danish market.

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