Alternative lending execs predict City funding boost

INSTITUTIONAL investment is the most likely source of fresh capital into the alternative lending sector, according to a survey of industry executives.

Global peer-to-peer lender Prodigy Finance surveyed 117 alternative finance professionals and found that 39 per cent think that the next wave of investment will come from institutions.

Just 17 per cent of respondents predict that retail investors will be the key source of funding for the industry, while 11 per cent believe that family offices and ultra-high-net-worth investors will provide the next wave of capital.

Read more: The biggest P2P funding deals of 2017

Institutional funding dominates the alternative finance sector in the US and is growing increasingly influential here in the UK, as platforms look to scale up. MarketInvoice and Funding Circle are among the alternative finance providers that have inked City funding deals over the past year.

Not everyone is comfortable with the role of institutional money in the sector, with some critics arguing that it may conflict with the retail investor base.

Read more: ThinCats concludes £200m funding round to scale up SME lending

Prodigy Finance’s poll also showed that 58 per cent of respondents believe that the UK’s alternative finance industry will grow after Brexit, with a further 30 per cent expecting the industry to remain the same.

Furthermore, 70 per cent of respondents feel that the UK alternative finance sector is either moderately or very insulated from potential interest rates hikes in the US or the UK.