THE PEER-TO-PEER Finance Association (P2PFA) members – including new entrant Folk2Folk – lent out more than £1bn in the first quarter of 2017.
The nine P2P platforms – Zopa, RateSetter, Funding Circle, Landbay, LendInvest, Lending Works, MarketInvoice, ThinCats and Folk2Folk – collectively represent more than 80 per cent of the UK market. They originated more than £636m in business loans during the first three months of the year and lent out around £368m to individuals, according to data released by the trade body on Wednesday.
Cornwall-headquartered business lender Folk2Folk joined the P2PFA in February so this is the first time its loan book data was included in the organisation’s figures.
Stripping out the £139.3bn lent by Folk2Folk, the eight other members had lent out a cumulative total of around £8.3bn by the end of the first quarter of 2017. This is up from £7.3bn in the fourth quarter of 2016 and £6.5bn in the third quarter of 2016.
Read more: 2016: P2P’s record year
The nine P2P lenders had 180,000 investors participating at the end of the first quarter and 420,095 borrowers.
“The growth in P2P lending volumes over the last three months highlights the success which platforms have secured in the market – delivering a permanent shift in the financial services landscape, and providing an attractive offering for investors and borrowers,” said Robert Pettigrew, director of the P2PFA.
“At a time when macroeconomic uncertainty appears to be the prevailing narrative, more than £600m has been lent to businesses through peer-to-peer platforms in the last three months, with almost thirty-seven thousand businesses having a loan at the end of the period.
Read more: UK P2P market breaks £7bn barrier
“It is clear that the ability of platforms to provide an offering responsive both to the aspirations of investors and the needs of borrowers has enabled a consistent pattern of growth which any sector would find attractive.”
While the P2PFA members as a group have notched up substantial loan originations over the last quarter, there continues to be a gulf between the biggest lenders and the other platforms.
Among the ‘big three’, Funding Circle lent out more than £328m over the three-month period, while RateSetter and Zopa lent out just over £210m and £246m respectively.
LendInvest channelled £116m into property projects, while MarketInvoice lent out £63.5m.
However, in contrast, Landbay lent £833,310 over the first quarter and ThinCats funded £15.5m. Lending Works originated £9.5m in loans over the period, with £9m coming through its Innovative Finance ISA, the platform said earlier this month.
Lending Works had to stop accepting new investors temporarily, just 24 hours after launching the tax-free wrapper in February, as it did not have enough loans to match the influx in funds. This underscores an ongoing challenge for the industry – how to find enough suitable borrowers to match the influx of yield-hungry investors in a low-interest rate environment.