Peer Funding closure due to lack of funding, not industry
PEER Funding’s compliance head has said that the peer-to-peer lending platform’s imminent closure should not reflect on the viability of the wider P2P industry.
In a call with Peer2Peer Finance News, Peer Funding’s risk and compliance director Roger Smith said that the closure of the platform was “more to do with us than the industry”.
“We started trading but we had a false start and we needed to raise money to push the business forward,” Smith said.
“We simply didn’t have the resources to take the company forward. We needed additional capital we were unable to raise.”
While Smith maintained that the platform’s failure did not reflect the potential of the wider P2P landscape, he did add that he was concerned about the “uncertain future” that an economic downturn could bring.
“Times are uncertain at the moment and the industry hasn’t been through a proper recession,” Smith said. “But [our closure] was more to do with us than the industry.”
Smith added that his priority now is ensuring that all retail investors are reimbursed as swiftly as possible, confirming that the company has kept investors’ money in a protected client account and will repay it in full on 21 August, ahead of the platform’s closure on or slightly after 1 September.
Peer Funding put up a “small number” of loans over its lifetime, all of which were repaid in full, Smith said. At the time of its closure, the company had not traded for two years.
Read more: Peer Funding to close its doors
The company’s directors do not at this stage have plans to launch a new company in the P2P space, Smith added.
Peer Funding’s closure comes after the high-profile collapse of Lendy in May, following months of speculation about mounting arrears and a legal dispute with a defaulted borrower.
Lendy went into administration in May with more than £160m outstanding on its loanbook.