THE PEER-TO-PEER lending sector is unlikely to see any consolidation, according to the founder and chief executive of business finance aggregator Funding Options.
Conrad Ford, whose platform provides small businesses with a variety of finance options including P2P loans, said he cannot see the value in mergers for the sector.
“I have read repeatedly that there is going to be lots of consolidation,” he told Peer2Peer Finance News. “I don’t believe that story, and I say that unequivocally. If you’re a big [P2P] player doing £100m in originations a month, why on earth go through all the pain of a merger for a book of £50m?
“I’ve done a few mergers and they usually go wrong. It would be much easier for them to get that £50m through normal customer acquisition.”
However, the former Barclays strategist expects to see more substantial collaboration between banks and fintechs this year.
“I think 2019 will be the end of the incubator and accelerator era; there will be proper commercial relationships with banks, not just PR partnerships,” he said.
Despite years of speculation, there has been little M&A activity in the P2P sector to date. However, there have been a number of strategic partnerships, such as last year’s tie-ups between banking giant Barclays and alternative business finance provider MarketInvoice, and P2P lenders Ablrate and Huddle.
This article featured in the March issue of Peer2Peer Finance News, now available to read online.