Government defends P2P lending platform due diligence
The government has defended the British Business Bank’s (BBB) level of due diligence and confidentiality agreements when it comes to peer-to-peer lending.
It comes amid continued scrutiny from former City minister Lord Myners who has submitted several parliamentary questions relating to the BBB’s exposure to bad P2P loans.
The government has previously said this information is “commercially sensitive” but Lord Myners asked earlier this month whether confidentiality agreements was the same for all P2P lenders.
Responding to the most recent query, Lord Callanan, parliamentary under-secretary for the department for business, energy and industrial strategy, said all the agreements are different but explained this was not the reason for not revealing default rates.
“Confidentiality agreements between the BBB and P2P lenders do not deal with aggregated data relating to multiple different platforms,” he said.
“The BBB does not aggregate P2P data from different platforms for reporting purposes.
“Given the very small number of platforms we invest in, we could not publish aggregate default rates without compromising confidentiality in relation to individual platforms.
“In keeping with our commercial approach, we do however continually monitor the market and carry out extensive due diligence on any P2P lender before entering any commercial agreement with them.
“Once an arrangement is in place, we receive regular data on the performance of our loan book to ensure that this is in line with the contractual expectations we have made with them.”
Read more: British Business Bank extends funding programme to P2P lenders
