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Thank goodness for college students.
Student loans, while under pressure and controversy in other areas, particularly politics, have fueled a large rise in digital and online lending, according to a new report from S&P Global Market Intelligence.
To wit: A group of 13 of the largest digital lenders nationwide originated $20.64 billion in loans during the first three quarters of 2016, up 31.6% from the same period in 2015. In addition to a surge in online student loans, the increase in overall digital lending activity stems from personal loans and small and medium-sized business loans, the report shows.
More evidence of digital lending growth: the five-year compound annual growth rate in loan originations for the group of digital lenders, in total, is up 137%, S&P reports. The growth has come so fast, the report adds, that in early 2016 loan demand began to outpace supply of capital. Many lenders, in response, have moved toward institutional investors, internal balance sheet funding and securities, the report states, to “fuel the feverish growth in the industry.”
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