PEER-TO-PEER platforms have defended their liquidity processes following claims that P2P investors are being forced to wait for more than 100 days before they can withdraw cash from their accounts.
A report in The Telegraph last week claimed that customers have been queuing up to sell their loans following the collapse of P2P platforms Collateral and Lendy, but are facing lengthy waits to cash out.
However, P2P platforms have challenged this view, pointing out that investors can often access secondary markets if they want to exit a loan early.
Stuart Law, chief executive of P2P lender Assetz Capital, told Peer2Peer Finance News that while he had heard about long withdrawal times at some platforms, this has not been the experience of his investors.
“We have not as yet encountered this, with well over £1bn withdrawn from our Access accounts instantly, after the required notice period – if any,” he said. “And of course the time it takes to process a bank transfer to the client’s external bank account.
“We have always designed in the best liquidity we could but investors wanting near guaranteed liquidity should stick to loss-making bank accounts (versus inflation).”
Assetz offers a 90-day access account, a 30-day access account, and a quick access account, which “provides the fastest possible access to cash in normal market conditions.”
Meanwhile, at ‘big three’ platform RateSetter, investors have historically been able to access their money within one day, on average. On 3 October, the platform is introducing a series of new investment products which have been designed to boost liquidity even further.
“Some P2P models have disappointed but RateSetter is delivering,” says the platform’s chief investments officer Mario Lupori. “Over the past nine years we have an unrivalled track record of liquidity, with investors able to access their money within one day on average, and our new investment products will further strengthen our position as the lowest risk and most liquid P2P investment.”
Zopa currently has a typical loan sale time of six days, down from eight days in September 2018. Zopa has also stated that most of its investors start receiving cash within less than 24 hours of requesting a sale.
Funding Circle’s investors can use the platform’s free secondary market to sell loan parts to other investors, fee-free. The platform has told investors that while it provides options for them to access their funds early by selling loans, this is not guaranteed and the time to sell is dependent on levels of demand from other investors.
However, Funding Circle has confirmed that the queue for investors to sell their loan parts to other investors has increased in recent months, bringing the current waiting time up to 100 days. As a result of this, the platform has begun to manage the proportion of old loans that can be allocated to retail investors’ portfolios.