Trends in Marketplace Lending: Expanding from the Balance Sheet

Trends in Marketplace Lending: Expanding from the Balance Sheet
Angela Ceresnie, CFO & Co-founder, Orchard

Orchard, based in New York City, is a technology company providing data and infrastructure solutions to investors and loan originators within the marketplace lending space. CFO & Co-Founder Angela Ceresnie made several observations about Orchard and the marketplace lending landscape:

  • Investors are attracted to marketplace lending for three reasons: yield, portfolio diversification and transparency. Data, in particular, is a major selling point: “The data that is available to investors who want to participate in this space is unmatched [by] anything they’ve ever seen before, and that’s very attractive.”
  • Future trends for marketplace lending on the investor side include: standardization of investor-originator transactions; diversification, as investors seek to deploy capital across multiple platforms and asset classes; and liquidity, with securitizations occurring across the globe.
  • Current challenges for investors: standardization, benchmarking, market performance metrics, and liquidity.
  • Current challenges for originators: increased competition (from banks, traditional lenders, and companies within the space); regulatory uncertainty, particularly in the US; and capital diversification.
  • In the future, the marketplace lending landscape will include variable priced auctions, a robust secondary market, and more liquidity outside the securitization market.

Ceresnie also reviewed the marketplace lending ecosystem, using a slide available on Orchard’s website: She noted that the number of institutions and service providers participating has grown.

Ceresnie concluded with thoughts on promoting the continued success of the marketplace lending industry, calling for a continued focus on the borrower, technology, and transparency.