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Peer2Peer Finance News | August 17, 2019

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‘Disruptive’ P2P lenders set to take a third of SME lending market

‘Disruptive’ P2P lenders set to take a third of SME lending market
Marc Shoffman

PEER-TO-PEER and other alternative lenders could ‘disrupt’ more than a third of business lending by 2030, new research claims.

A new report from accountancy giant PwC, called ‘harnessing the power of disruption’, identifies key financial services areas open to – and already being impacted by – advances in technology, changes in demographics and customer behaviour.

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In the UK small- and medium-sized enterprises (SME) sector, the report found that new digital entrants such as P2P lenders could dominate the market for underserved business borrowers, representing £4.1bn or 37 per cent of lending.

It warned that new entrants could face the pressure of regulatory scrutiny or a full economic cycle but said that this does not mean established brands can rest on their laurels.

The report suggested that financial services firms should keep a close eye on changes in appetite among their customers, highlighting the emergence of P2P lending as a “preferable option” for those not able to access lending through mainstream sources.

Business P2P lender Funding Circle is highlighted as an example of a “disruptive” brand that is “providing SMEs with easier access to credit and growing quickly.”

“Firms operating in a sector where the consumer is becoming more sophisticated and more demanding will have to embrace technological disruption – or be disrupted themselves,” Alan Gemes, senior partner at PwC, said.

Read more: Lenders report boom in demand for unsecured credit