Peer-to-peer lending platforms have been praised for their response to the Covid-19 pandemic.
Innovate Finance chief Charlotte Crosswell said that she has been “encouraged” by the positive response to the P2P lending sector during the Covid-19 pandemic, and hopes that alternative lenders will be utilised more by the government if a second wave of the pandemic hits.
Crosswell (pictured), who is part of a financial services group representing P2P and fintechs in post Brexit trade talks, said the sector has played quite a significant role during the crisis, delivering finance to small– and medium-sized enterprises (SMEs) and participating in government support schemes such as the coronavirus business interruption loan scheme (CBILS).
She said she hopes fintechs and P2P lenders will be utilised more if a second wave of Covid-19 hits.
“I’ve been encouraged by conversations recognising the role P2P has played during the crisis,” Crosswell said.
“It was hard to prove the role fintechs could play but they have played quite a significant role during the crisis and it’s important for us to ensure that’s taken into consideration.
“Looking at the role fintechs can play as part of the recovery is really important and our role is to amplify that message as a strong voice at the table with the British Business Bank and the Treasury on future considerations.
“I certainly hope fintechs and P2P are considered more if there’s a second wave. I think the challenge from the beginning was when the British Business Bank leveraged lenders accredited for the enterprise finance guarantee scheme (EFG) for CBILS accreditation, there wasn’t many EFG accredited lenders in this space.
“With whatever comes next it’s important that both banks and non-bank are taken into consideration for the amount of business lending taking place.”
Crosswell said there’s huge demand for lending at the moment from CBILS and post CBILS so there will be a strong demand for alternative finance providers.
“A lot of lenders are seeing that demand from SMEs and meeting the investment opportunities to fund those,” she said.
“In 2008, the majority of fintechs launched to meet the opportunities that arose from the financial crisis for different types of lending and we fully anticipate that will accelerate of the back of this crisis with opportunities for P2P to fulfil.”