Why Millennials Are Choosing Alternative Financing

Why Millennials Are Choosing Alternative Financing

The term, Millennial, pertains to those aged 18-37 in the present day. They are today’s standard of modern youth with high regard for creativity, passion, and values that drive the economy of the Philippines.

However, there are those who wrongfully perceive Millennials to be uncaring, inefficient, and irresponsible with their finances.

This is not the case and it is evidenced by a poll conducted by Monily which resulted in positive results in great favor with the interests of Millennials in Alternative Financing. You must be asking yourself, “Why are millennials choosing alternative financing today?”

Millennials Have a High Regard for Technology

Some may think of technology as a means of distraction but Millennials use this as a tool to promote their advocacies, business ventures, intelligent discourses, communication aids, alternative financing sources, and many more.

This attitude will promote significant technological innovations in the country’s finance industry which includes alternative financing.

As millennials use many devices and immerse themselves in an array of various application programming interfaces, this will be a way to have a quick, fast-approval process with fair interest rates in digital lending.

Smartphones can be the millennials guide toward alternative financing which can bring ease to their money woes.

This will allow a rapid interaction between lending services and millennial consumers. It has led to important changes in the financial technology industry which Filipino millennials are recognizing as a great means to achieve financial independence.

Millennials See Alternative Financing as a Significant Investment

According to Governor Nestor A. Espenilla, Jr. during his speech entitled, “Thrive Not Just Survive at the Bangko Sentral ng Pilipinas in April of 2018, industry reports show that mobile payment and alternative finance firms dominate the financial technology (fintech) market with 26 and 17 players back in 2017 and the numbers steadily grow with each passing day.

With the transaction value of the fintech market in the Philippines projected to amount to US$10.5 billion, the future of alternative financing remains to be a sound investment for millennials.

Statistics show that the total transaction value in the Alternative Financing segment will amount to US$2m by the end of 2018 and it is expected to show an annual growth rate of up to 65.3% which will result to the total amount of US$11.7m by the year 2022.

This has proven that the Philippines’ alternative financing schemes like online loans can compete on a global scale because there is so much potential for further growth in the alternative financing industry of the country. This also proves that alternative financing is on the rise to be a great investment for millennials.

They are Natural Innovators

More millennials are catching on the startup bug which is a great entry point into dozens of industries like digital marketing, media production, etcetera.

This is attributed to their qualities of innovation, creativity, and determination to contribute to the greater scheme of things.

Although they are aware of the risks that innovation can bring, this doesn’t stop them from going for it and leverage on new technologies such as alternative financing to realize this goal for themselves.

As millennials are in a constant hunt for new and better ways to innovate, alternative financing becomes their partner in making sure that these efforts are not put to waste.

Alternative financing methods such as crowd-funding and peer-to-peer lending can expand their potential in gaining financial access that can bring traction to their business ventures and micro, small, and medium enterprises.

Millennials Are Used to Speed

Alternative financing offers rapid solutions to tasks requiring millennials to step up their management of finances.

The world in the present day is used to instant and quick processes which makes people become uneasy when it shifts otherwise.

Internet, fast-food restaurants, even instant messages, these are all signs of the rapid technological advances that people and millennials have grown accustomed to.

They are inclined to choose alternative financing simply because it is the faster option and it caters to their needs at their own pace.

Online loans that offer quick and fast approval earn the approval of millennials. With alternative financing, ideas can turn into reality in just a matter of minutes or a day.

Millennials recognize this as a great advantage because this is what will lead them to a successful point in whatever it is they may choose to achieve.

They Are Provided with Many Options

There is a certain misconception about millennials that are not a part of their character at all. Some people tend to view this generation as picky or stubborn but that is certainly not the case.

Generally speaking, millennials just have a way of exploring their options before settling on a final decision.

Alternative financing attracts millennials because of this very reason. There is always something else in this financial technology method.

Millennials find choices appealing and online loans provide that to them with easy payment schemes with tons of considerations from the lender.

This enables millennials to use a new system in funding, all while expanding their horizons in terms of their ideas and concepts.

As the Filipino millennial grows, so does the alternative financing industry which is motivated by the many people seeking financial independence for themselves no matter what situation or condition they may in.

Millennials Treat Alternative Financing as a Partner

Traditional financial sources like banks tend to be too much of a hassle to manage, or so it seems for millennials.

With all eyes on them, millennials experience financial pressure from their families, peers, or even themselves. This is where alternative financing comes in.

Millennials see a partner in alternative financing sources because it is indiscriminate when it comes to loan approvals and other criteria. Alternative financing brings about a renewed sense of vigor to be financially literate and to seek out financial options that will promote the best interests of millennials.

Key Takeaway

Millennials choose alternative financing because it is a simple way to achieve optimal financial results. With the rapid processes that come with alternative financing, nothing is impossible for the millennials who are dreamers, creators, travelers, and whatever else they may set their mind out to be. Millennials are beginning to be financially conscious by making smart decisions in alternative financing. Why not start today?

Sources:

https://www.forbes.com/sites/sherylnancenash/2012/05/22/why-young-folks-are-fleeing-to-alternative-financial-products/#5297f5a13e97

https://www.allbusiness.com/millennials-flocking-alternative-funding-101386-1.html

https://www.philstar.com/business/banking/2018/04/10/1804353/financial-technology-transactions-philippines-double-11-million-2021

https://www.statista.com/outlook/399/123/alternative-lending/philippines

https://www.statista.com/outlook/297/123/alternative-financing/philippines#market-globalRevenue

https://www.statista.com/outlook/295/123/fintech/philippines#market-revenue

http://www.bsp.gov.ph/publications/speeches.asp?id=606

https://millennialmagazine.com/2017/07/19/why-40-of-millennials-are-choosing-alternative-financing/