Direct Lending and P2P Lending for 2017
As the wider UK economy continues to face a period of uncertainty, P2P lenders remain positive about their future.
According to figures from the Peer-to-Peer Finance Association, 2016 saw lending volumes for its members (who represent 75% of UK P2P lending) increase by two-thirds – cumulatively breaking the £7bn barrier. Despite a dip in Q2, Q3 and Q4 saw strong growth. Robert Pettigrew, Director of the P2PFA noted; “Whilst uncertainties in the broader economy attract much comment, it is clear from the robust growth in levels of peer-to-peer lending that P2PFA platforms and their investors are positive about the future.”
Observations from our own annual UK P2P lending market review mirror this expansion – with lending up 39% in 2015 to £3.2bn in 2016.
2017 lending volumes are off to a good start. January figures show a record month for consumer focused P2P. Zopa celebrated passing £2bn in loans, lending over £80 million in January. The combined total for P2P consumer lending platforms in January was £154m – the largest ever for this sector in a single month.
We would add a note of caution though, that we expect 2017 to demonstrate a “flight to quality” for P2P lending in the UK, with a number of weaker platforms seeing slower growth rates and/or exiting the industry.
Fintech innovation – Mark Carney at the G20
Mark Carney’s comments on Fintech innovation at the recent G20 conference generated a number comments across the press. Bank of England Governor Carney warned that certain developments in fintech, such as robo-advice, could pose a systematic risk unless regulators properly monitor them. Fintech is an important tool for financial innovation in the banking industry and as such increased interaction between innovators and regulatory bodies like the FCA is essential.