FUNDING Circle has a shortlist of five countries it is interested in expanding into, its chief strategy officer has revealed.
The peer-to-peer business lending giant already operates in the UK, the US, the Netherlands and Germany. But Lisa Jacobs (pictured), chief strategy officer at Funding Circle, told Peer2Peer Finance News that the firm is now considering new geographies.
She said there are four factors that Funding Circle considers when entering new markets: demand for small- and medium-sized enterprise (SME) borrowing; investor sentiment; operational complexity including the regulatory environment; and credit data availability.
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Jacobs said the firm could enter new markets via organic expansion or acquisitions. Funding Circle entered the German market by acquiring Zencap in 2015.
“Our aim is to help small businesses grow and become the first choice for small businesses globally,” she said.
Jacobs declined to comment on specific regions but appeared to rule out areas such as eastern Europe, Africa and Asia for now, due to a lack of accessible data.
“Most P2P lenders in these types of regions are focused on the short term,” she said.
“It is important for us that a region has accessible credit data so that we can maintain our own long-term lending business model.”
Jacobs also said that Funding Circle may consider launching investment funds in different countries, in order to diversify its funding sources.
Within its home market, Funding Circle is not focusing on any specific regions or sectors, Jacobs said. However, she added that the platform’s data is “automatically indexing” to areas where banks have pulled away such as the north east and north west of England.
“There is a myth that we are the lender of last resort,” she said.
“People are coming to us out of choice because of the speed of our proposition and convenience.”
This article featured in the December issue of Peer2Peer Finance News, now available to read online.