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Peer2Peer Finance News | July 21, 2019

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Is an IFISA-inspired boom coming to the P2P sector?

Is an IFISA-inspired boom coming to the P2P sector?
Marc Shoffman

THE PEER-TO-PEER Finance Association (P2PFA) has reported yet another quarter of increased lending among members in the sector, and the figures show just how beneficial ISA manager status can be.

P2P platforms offering Innovative Finance ISAs (IFISA) have previously said that most inflows have been coming in this tax year, and the latest P2PFA data shows just how much of a boost the fully regulated firms are getting.

Lending Works and Landbay, which both received full Financial Conduct Authority (FCA) authorisation and launched IFISAs at the start of this year both recorded some of the biggest increases in loanbook sizes and lenders.

This has given them a headstart over Zopa and Funding Circle, who only gained FCA approval in May and IFISA manager status in June and July respectively.

Funding Circle may be the biggest lender overall with a loanbook of £2.7bn, up 80 per cent on the same period last year, but Lending Works has seen the highest rate of growth annually at 113 per cent to £71.6m.

On a quarterly basis, Landbay saw its loanbook increase by the most at 28 per cent to £59.5m.

Furthermore, Lending Works, which launched its IFISA in February, has seen its number of lenders grow by 14 per cent on a quarterly basis and 116 per cent annually to 3,345.

This was followed by Landbay, which launched its IFISA in February, registered an 8.3 per cent quarterly increase and 99 per cent annual growth in lenders to 2,469.

In comparison, Funding Circle still has the most lenders at 65,422, but this was up just 4.4 per cent since the previous quarter and 22.2 per cent annually.

Both Landbay and Lending Works saw the number of borrowers increase by the largest percentage on a quarterly basis at 20 per cent and 21 per cent respectively. Landbay had 304 borrowers at the end of the third quarter of 2017, while Lending Works had 8,523.

The annual figures tell a slightly different story, with Funding Circle seeing a 75 per cent boost to 39,538 borrowers. Zopa still has the most borrowers at 194,865.

There are more fundamentals to comparing P2P platforms as there is a wide variety in the propositions offered to investors and borrowers, but the figures do show increasing interest in the sector and suggest more money could be coming in now that more of the major players are fully regulated and IFISA-ready.

That can only be good news now that Zopa and Funding Circle are fully regulated and ready to launch their IFISAs.