We examine 3 ways fintech companies are helping consumers navigate financial challenges amid the economic downturn.
As the global pandemic and related shutdowns continue to create rising income loss and unemployment rates, consumers need financial assistance more than ever.
Borrowers are missing scheduled debt payments at record levels, while loan impairments doubled in just 1 month to reach 12% of all consumer loans in April 2020.
In response, banks are rapidly tightening credit and increasing loan loss reserves. In April, revolving credit fell by an annual rate of 65%, and in each of the first 2 weeks of that month, revolving consumer loans at US banks fell by 1.5%, dropping to $833B in total — the biggest weekly declines since 2010.
As the pandemic continues to shake up the consumer banking and lending space, fintech companies are stepping in to provide alternative ways for consumers to access capital or address unemployment.