UK P2P lending hits £6.5bn
PEER-TO-PEER lending through the UK’s largest platforms has almost reached £6.5bn, new research has found.
Data from the Peer-to-Peer Finance Association (P2PFA), which represents the Big Eight lenders, found that investors lent more than £700m through the platforms in the third quarter of the year – up from £658m in the second quarter but down from £715m in the first three months of 2016.
This brings cumulative loans up to £6.498bn.
The total number of current lenders rose to 161,401 in the third quarter from 150,376, while the number of borrowers rose to 363,198 from 331,107.
“Data from the third quarter of 2016 highlights the strength of peer-to-peer lending in the United Kingdom, and underscores the value that this form of alternative finance is providing to the economy for borrowers – both business and consumer – as well as lenders,” said P2PFA chair Christine Farnish.
“Peer-to-peer lending continues to deliver a competitive alternative to traditional lending.”
Zopa continues to top the chart, with cumulative lending hitting £1.732bn in the third quarter, up from £1.556bn in the previous quarter.
Next is Funding Circle, with a cumulative total of £1.524bn, up from £1.341bn in the second quarter.
Investors have cumulatively lent £33.636m through Lending Works, the least out of the eight platforms. However, this could soon change as the firm received full Financial Conduct Authority Approval last week, paving the way for its launch of the Innovative Finance ISA. The tax-free wrapper is predicted to open up the P2P market to many more retail investors.
“As Lord Turner said last week: at an accelerating pace, direct non-bank lending has extended to segments previously almost entirely dominated by banks,” added Farnish. “The direct lending industry will grow and play a useful role in our overall credit supply system.”
There is plenty of scope for the UK’s P2P market to grow further. A recent study by accountancy firm KPMG and the Cambridge Centre for Alternative Finance found that the global P2P market grew by 271 per cent to more than $130bn (£106.4bn) last year, mainly due to China and the US.