Peer-to-peer lending platforms have vowed to do all they can to support businesses and protect investors as the coronavirus pandemic threatens to cause a global recession.
Since the Covid-19 virus was declared to be a pandemic by the World Health Organisation, P2P lenders have been quick to implement new measures to ensure that staff, borrowers and lenders are not left behind in the ongoing economic crisis.
Zopa has offered a payment freeze to borrowers who are having trouble making repayments due to the impact of the coronavirus. RateSetter and Funding Circle have both urged borrowers to get in touch if they are concerned that they may not be able to make repayments – both platforms have offered to help borrowers where possible.
Meanwhile, Crowd2Fund has said it is referring all distressed business loans to the government-funded British Business Bank, while asset-backed lender Ablrate has also offered its borrowers assistance in accessing government support.
In Ireland, Linked Finance has applied a two-month payment break to all loans in the hospitality industry, as well as launching an instant access account to help small businesses access cash quickly. Other platforms, such as Simple Crowdfunding and Assetz Capital, have reported a spike in demand from worried borrowers and opportunistic investors who are keen to escape the ongoing stock market volatility in favour of fixed-rate returns.
More than a dozen platforms told Peer2Peer Finance News that they were taking a ‘business as usual’ approach, with staff working remotely and phone lines remaining open. These efforts have gone some way towards reassuring investors and positioning the P2P sector as a reactive and responsible investment option, against a backdrop of plummeting interest rates and tumbling stock market values.
“We’re monitoring the situation closely and will continue to take appropriate steps to ensure it is business as usual for our investors while ensuring the wellbeing of our employees is maintained,” said a spokesperson for property-backed lender Kuflink. “We aim to thrive and truly demonstrate the strength and value of innovative P2P fintech, even with the recent uncertainty and economic turbulence which has caused concern amongst investors.”
Similarly, Money&Co has implemented alternative working plans to ensure its services to lenders and borrowers remain unaffected. “Circumstances have changed, and will change again, but please be assured we have already acted to ensure continuity of service, and will continue to move, plan and react in an agile fashion,” said a platform spokesperson.
“The gyrations of the stock market also caused alarm in some quarters.
“As we’ve consistently pointed out, one of the great attractions of platform lending is its lack of correlation with equity returns or interest rate fluctuations.”
Meanwhile, rural lender Folk2Folk emphasised that its loans have fixed rates, so are not subject to stock market volatility, and are secured against property. The platform also undertakes regular portfolio reviews to check the status of loans and identify any issues early on.