Peer-to-peer consumer lender Leap Lending said it has continued to grow throughout the Covid-19 crisis after launching in December last year.
The firm told Peer2Peer Finance News that it has seen more investors put money into the platform during the pandemic and is planning on launching an Innovative Finance ISA soon.
On the borrower side, it has reported huge demand from new borrowers, while some customers have paid down their loans earlier than expected during the crisis.
“Little by little the business is growing,” said chief executive Fawzi Kyriakos-Saad.
“Covid-19 has given us a boost. It has been extremely positive, it has helped increase our volumes dramatically and made people more aware of our offering and how we work.
“People have been staying at home for two months and taking advantage of this time, for example by borrowing small loans of £2,000 to £5,000 from us to do home improvements.
“We’ve seen people be more cautious having time to look at their credit card bills to see how much they have been charged and deciding to refinance their cards to a cheaper amount than what they’re paying today. And people have had free time to look at their finances in general.
“We are able to give higher rates to investors and lower rates to borrowers while undergoing very thorough work with our credit checks to have as few defaults as possible.”
Both Kyriakos-Saad and the firm’s finance director and chief operating officer Daniel Napon have previous experience in the P2P space, having run another P2P consumer lender, Quidcycle.
The firm has developed a system of credit scoring, using open banking to analyse 12 months’ worth of bank transactions from borrowers to determine if they can afford the loans and whether there are any triggers of traits such as excessive gambling. It claims to be conservative in its lending and avoids risky borrowers.
“We’ve kept our rates steady so there is attractiveness for investors when there’s a volatile stock market and interest rates on some savings products are falling,” said Napon.
Kyriakos-Saad is optimistic for the future of the P2P consumer lending market.
“It’s the first time P2P would have gone through a crisis, so it’s a very crucial time to see how P2P lenders will be able to perform during Covid-19 and the few months afterwards.
“The big picture is extremely positive. Why wouldn’t you be optimistic?
“We’ve put together a system that’s extremely transparent with very little friction which both lenders and borrowers benefit from.”
Leap Lending is not the only alternative lender to report an uptick in business during the pandemic. Property development finance lender Nexa Finance recently revealed that Covid-19 has proved to be its busiest time since it launched in August last year.