Who are the real main players in P2P?
FROM the main accountancy firms to Premiership football clubs guaranteeing Champions League status, many industries herald the top four, but who would rank the highest in peer-to-peer lending?
The release of the Peer-to-Peer Finance Association (P2PFA)’s lending data for the fourth quarter of 2016 shed some light on the state of the main players in the market.
The top three has typically been made up of the usual suspects of Zopa, Funding Circle and Ratesetter, but the order differs depending on how their business is measured and there is hot competition for that fourth place.
Cumulative lending is the headline figure most P2P lenders use. Based on this, Zopa would be the biggest with £1.9bn of lending by the end of 2016, up 55 per cent on the fourth quarter 2015, followed by £1.8bn from Funding Circle, an increase of 81 per cent over the same period.
Ratesetter comes third with lending of £1.6bn, an increase of 66 per cent in 2016.
Read more: Global P2P market worth over £106bn
But even this seems simplistic as Funding Circle operates in a different marketplace and it may just be that Zopa provides bigger loans or is a better-known brand.
The battle for fourth position by cumulative lending is also an interesting one. LendInvest would place fourth based on the P2PFA data with lending of £855m in 2016, but is that unfair on LendingWorks which – while only lending £39m – actually increased its book by 109 per cent over the year?
Cumulative lending | Q4 2015 | Q4 2016 | % change |
Zopa | £1,236,813,000 | £1,926,083,724 | 55% |
Funding Circle | £1,007,208,000 | 1,830,397,245 | 81% |
RateSetter | £962,039,000 | £1,604,406,564 | 66% |
LendInvest | £496,243,000 | £855,354,293 | 72% |
LendingWorks | £18,774,000 | £39,368,050 | 109% |
Source: P2PFA |
But cumulative lending is pretty historic and can be skewed by larger loan sizes.
Another method is new lending for the year. The P2PFA figures would put Funding Circle on top at £823m, followed by £689m from Zopa, £624m from RateSetter and £358m by LendInvest.
But again, LendingWorks could stake a claim for fourth place, having increased new lending by 36 per cent.
New lending | Q4 2015 | Q4 2016 | % change |
Funding Circle | £530,584,000 | £823,190,365 | 55% |
Zopa | £532,143,000 | £689,270,670 | 29% |
RateSetter | £517,986,000 | £642,367,785 | 24% |
Lendinvest | £300,827,000 | £358,541,899 | 19% |
LendingWorks | £14,111,000 | £19,302,146 | 36% |
Source: P2PFA |
The trouble with lending values is that just because a platform has a quiet few months, that isn’t necessarily a weakness.
Rather than lending values, perhaps the number of borrowers and lenders at the end of the period could also shed some light?
Zopa recorded the highest number of borrowers at 59,174 by the end of 2016, narrowly beating Funding Circle’s 56,548. But of the big three, RateSetter increased its lender numbers by the most at 53 per cent. However, if we use that measurement, LendInvest actually scores well with a 201 per cent increase in lenders to 7,476 over 2016.
Lenders | Q4 2015 | Q4 2016 | % change |
Zopa | 53,016 | 59,174 | 11% |
Funding Circle | 42,854 | 56,548 | 31% |
RateSetter | 26,493 | 40,795 | 53% |
LendInvest | 2,481 | 7,476 | 201% |
Source: P2PFA |
Some may say that the number of borrowers is more relevant.
By this measure, RateSetter comes top with 199.702. followed by Zopa at 154,574, then Funding Circle with 26,587. But Funding Circle has actually increased its borrowers by the most out of the top three at 71 per cent. However, Lending Works then gets back in the mix after the number of borrowers on the platform soared 136 per cent in 2016 to 6,887.
Borrowers | Q4 2015 | Q4 2016 | % change |
RateSetter | 138,525 | 199,702 | 44% |
Zopa | 113,586 | 154,574 | 36% |
Funding Circle | 15,479 | 26,587 | 71% |
Lending Works | 2,911 | 6,887 | 136% |
Source: P2PFA |
Of course, the P2PFA’s eight members only represent a chunk of the market, albeit around 75 per cent.
Whichever way you look at it, the industry is growing, and as football fans would say, there is still a lot to play for.
Read more: P2P’s record year