Advisory experts have backed the peer-to-peer lending sector to become a mainstream investment class after Covid-19.
Mark Turner, managing director, regulatory consulting at Duff & Phelps, said the pandemic presents an opportunity for the sector to prove itself.
“I think there is the opportunity for P2P lending to be seen as a mature, mainstream asset class and especially if it can prove itself through this crisis as a sector that can manage risks effectively and generate good returns for investors, then I think the sector could really come of age,” he said.
Similarly, Frank Wessely, partner at Quantuma, said that the P2P lending sector will be able to demonstrate it is a much more robust and secure asset class once it emerges from this pandemic, as long as there no further platform failures.
“I think Covid-19 will be doing the industry a favour in terms of allowing it to show it can survive a pandemic of this nature and still provide market beating returns to investors,” he said.
I think because it’s so extreme and unique, the opportunity is there for the sector to show it’s here to stay.
“Market cycles are generally caused by market factors, but Covid-19 is more extreme. It just happens to be a pandemic on this occasion and shows how vulnerable markets are to non-financial threats.
“The economy will bounce back slowly and gradually depending on the degree of support provided to businesses and how the Brexit negotiations go.”