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Changing Face of Finance: Alternative Credit Provision

Restraints on bank lending have left a multi-billion dollar gap in the funding needed to support business growth and vital infrastructure spending. But now alternative credit providers are stepping into the breach, often with our help, to change the funding mix.

More than five years after the onset of the global financial crisis, major economies find themselves still wrestling with a familiar conundrum and it boils down to this.

How can governments regulate systemic financial risks effectively so that the crisis does not recur, but do so without choking off the supply of credit to companies and much-needed projects to stimulate growth at a time of economic paralysis? No one doubts that the crisis clearly called for a tough regulatory response to control systemic risks. But it’s a question of balance and of encouraging new and more secure approaches to financing the economy.

Alternative credit providers are definitely making their presence felt. New products and financing techniques are also helping this to swing to non-bank providers, at a time when regulatory pressure is forcing traditional banks to decrease their overall lending.

 

 

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