EIGHT of the UK’s largest peer-to-peer platforms lent £2.6bn over the last year, at an average of £197m per month, according to a new index from online aggregator OFF3R.
September 2016 was the strongest month for P2P lenders, with almost £234m being lent, while April saw a seven per cent drop month-on-month to £186.2m. Lex Deak, chief executive and co-founder of OFF3R said that the April slump was likely down to a number of factors, such as Lord Turner’s negative comments about the P2P market and Lending Club’s loan book discrepancies scandal. However, he pointed out that the sector bounced back with a 20 per cent increase in August 2016, in the aftermath of the base rate cut.
“I’m entirely bullish around the P2P space,” Deak told Peer-to-Peer Finance News. “The data supports that view that apart from a little lull post Brexit and post Lending Club, it’s only been going in one direction. In fact, there was a 20 per cent jump in August and September. I can’t see it going anywhere but up.
“The platforms are being backed by more institutional investors and they are becoming more refined, government is getting behind them, the interest rates are down, we have a tax break in the form of the IFISA – it feels like a cocktail of things to suggests that the industry is not going anywhere.”
The OFF3R Index launched today and will be updated on a quarterly basis using data gathered from eight P2P platforms: Zopa, Landbay, RateSetter, ArchOver, Marketinvoice, Lending Works, Funding Circle and Thin Cats. All of the platforms are members of the Peer-to-Peer Finance Association (P2PFA), apart from ArchOver. The only P2PFA member missing from the analysis is LendInvest.
The index also tracks the equity crowdfunding sector, and found that £18m was being raised per month across seven crowdfunding platforms including Seedrs and Crowdcube.
Deak said that he would eventually like OFF3R to become “the MoneySuperMarket for the alternative investment space”, with a dynamic, real-time index, adding that he was “excited to be launching this report at such a critical time.”
Peer-to-peer lenders have had a run of good fortune recently, with rapid growth across the entire sector. Last month the P2PFA reported that the UK’s P2P sector had loaned almost £6.5bn since inception, while a recent study by accountancy firm KPMG and the Cambridge Centre for Alternative Finance found that the global P2P market grew by 271 per cent to more than $130bn (£106.4bn) last year, although this growth was mainly centred in China and the US.