Who will be the first £3bn P2P lender?

IT HAS been a busy quarter for the “big three” peer-to-peer lenders with Zopa, Funding Circle and RateSetter all reaching the £2bn lending milestone.

But who will be first to £3bn?

The latest quarterly loanbook figures from the Peer-to-Peer Finance Association (P2PFA) give interesting insight into how the big three have grown to £2bn and what could be in store as they aim to attract their next £1bn from investors.

Zopa’s loanbook reached £2bn in January and was at £2.4bn as of the end of the second quarter of 2017, P2PFA figures show.

On a quarterly basis it has grown by 9.8 per cent and 35.4 per cent annually.

Funding Circle, which hit £2bn in February and was at £2.4bn by the end of the second quarter, saw 12 per cent growth since the first quarter and 45 per cent annually.

Meanwhile, RateSetter, which hit £2bn last week, had £1.9bn at the end of quarter two, up 9.6 per cent since the first quarter and up 35.9 per cent annually.

Going by growth rates, Funding Circle appears to be growing fastest so could hit the £3bn the quickest.

Of course other factors will come into play.

Zopa and Funding Circle both have full Financial Conduct Authority authorisation. Zopa has already launched its Innovative Finance ISA and Funding Circle is likely to do so by the next ISA season, which should give them more funds to deploy.

RateSetter is still awaiting approval so could fall behind on this basis.

Meanwhile, Lending Works and Landbay have both shown how having an IFISA can boost a loanbook.

Lending Works, which was the first of the P2PFA members to launch an IFISA in February, saw lending increase to £58,441 in the second quarter, up 9.5 per cent on a quarterly basis and 48.7 per cent annually.

Landbay, which also launched its IFISA in February, saw its loanbook grow five per cent on a quarterly basis and 8.2 per cent annually to £43,975.

Meanwhile, MarketInvoice put in a strong performance during the second quarter, with its loanbook hitting £1bn, up 9.7 per cent on the first three months of the year and 34 per cent annually.

Overall, whoever gets to £3bn first, the industry is still clearly growing.