THE PEER-TO-PEER finance industry continues to shrug off Brexit concerns and hit new milestones in growth, as Assetz Capital becomes the latest lender to have a record-breaking month.
The Stockport-headquartered platform, which predominantly focuses on property lending, originated £26m of loans in October.
“We had our biggest ever month last month with £26m of lending. Since June we’ve really started to roll out our model now and push the origination but maintain the credit quality along the way,” co-founder and chief credit officer Andrew Holgate told Peer-to-Peer Finance News.
“Anyone can put cash out the door, but we’re making sure that credit quality is at the right level – everything we do is for the benefit of our lenders and we want to make sure that they lose as little as possible.”
Peer-to-Peer Finance News reported last month that Zopa funded £67.8m in loans during September, breaking its previous record by more than £10m, while Funding Circle originated £25m in loans in the last week of September – the most successful week in the firm’s history.
At the end of September, RateSetter announced that its investors had earned £50m in interest since the platform’s launch.
The result of the EU referendum vote in June triggered widespread concerns about an economic downturn in the UK, but so far fears appear to have been unfounded. Last week, official figures showed that the UK economy grew by 0.5 per cent in the third quarter, beating expectations.
Meanwhile, P2P lending through the UK’s largest platforms reached a cumulative total of £6.5bn last month, according to data from the Peer-to-Peer Finance Association. Investors lent more than £700m through the platforms in the third quarter of the year.
There are concerns that a downturn in the economy would cause companies to rein in their spending and borrow less, which would have a negative impact on the P2P industry.
However, some argue that opportunities could arise if the credit cycle turns, as banks will lend less, driving more business towards P2P platforms.
“In times of economic dislocation, that’s when these opportunities become even greater,” Samir Desai CBE, the co-founder and chief executive of Funding Circle, told Peer-to-Peer Finance News at LenditEurope last month. “Banks pull back from the market and there are a lot of good, small businesses that can’t access the loans that they need to expand.”
Last week, figures released by the British Bankers’ Association showed that high-street banks lent £312m less to UK businesses in September.
“The fall in business lending among Britain’s biggest banks…suggests that post-Brexit nerves and economic volatility have chipped away at the confidence of both high-street lenders and business owners, who may well have shelved expansion plans since the EU vote,” said Kevin Caley, founder and chairman of P2P platform ThinCats.