The peer-to-peer lending industry has welcomed news that a Covid-19 vaccine could be rolled out by the end of this year, bringing hope that life can return to normal in the UK.
Like other sectors, the P2P industry has been knocked by the coronavirus as the resulting economic slump has led to a rise in default rates among borrowers.
Meanwhile, the number of investors trying to withdraw their money from P2P platforms has surged and many lending platforms have restricted withdrawals to slow the level of cash being withdrawn.
David Bradley-Ward, chief executive of asset-backed business lender Ablrate, said news of the vaccine was “fantastic” for the industry, albeit tinged with caution on expectations of when it will be available.
“Cautious optimism is what we feel presently,” he said. “Businesses can see light at the end of the tunnel. With this announcement business has the data to make assumptions and therefore plan. This is the most important thing for all sectors including ours, which has been wrapped up in the macro effects of this virus.
“The issue businesses have had up to now is the uncertainty of whether or not more lockdowns would be imposed,” he added. “We all thought the previous easing of lockdown was the end of such draconian measures and we now know this government is prepared to lock down without any real warning or care for what happens to the economy. Businesses cannot operate under such circumstances.”
Stuart Law, chief executive of Assetz Capital, added that news of the vaccine should boost investor confidence and show there is light at the end of the tunnel.
“I’m sure that if the vaccine proves a widespread success and investors can see genuine impact on the sustainability of businesses, then it will help increase confidence further as we come out of this difficult period,” he said. “In reality it is specific sectors of the economy that took the brunt of the economic hit including bars, restaurants, hospitality generally, travel and so on. Those will be the main beneficiaries economically from widespread testing and vaccinations.”
Shares in P2P business lender Funding Circle, which is listed on the FTSE All-Share index, have risen by almost eight per cent this week to around 84p currently. At the peak of the Covid-19 pandemic in March, the shares dropped to a low of 25p.
Pharmaceutical giant Pfizer announced earlier this week its experimental Covid-19 vaccine was more than 90 per cent effective based on initial trial results. The UK government has purchased 40 million doses of the vaccine, with the first inoculations expected to take place before Christmas.
The virus has killed more than 50,000 people in the UK.