P2P lenders ‘shouldn’t expect’ investor boost from collapsed platforms

An industry stakeholder has claimed that peer-to-peer lenders expecting a boom in investment from investors from collapsed platforms could be misguided.

Andrew Holgate, chief executive of fintech consultancy Equitivo, put this down to how many investors there are in the sector and the fact that those lenders in collapsed platforms may be put off from P2P.

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“The P2P lending community is probably, at best, 300,000 individual investors,” Holgate said in a LinkedIn post.

“Of those 50,000 are probably really active. They will know all of the platforms out there and will chose which to invest in.

“If they don’t invest with you, there’s a reason why they don’t and it probably isn’t because they don’t know about you.

“Many of the investors on the failed platforms have been stung with losses, so their investing funds have reduced or they are now put off investing in this asset. Many of the investors are probably already your customers.

“I can’t see what is left then to pick up from these failed platforms. Expecting a boon from these failures is perhaps misguided.”

In February, Octopus Choice closed permanently and The House Crowd entered into administration.

Following Metro Bank acquiring RateSetter and its remaining P2P portfolio, the platform’s P2P accounts will be closed from 2 April and all invested money will be returned to investor holding accounts.

Folk2Folk has announced it is targeting money from collapsed platforms while Peer2Peer Finance News understands that several P2P lenders have received transfer-ins from RateSetter investors into their own Innovative Finance ISAs.

For example, Assetz Capital has received a huge spike in transfer ins from these lenders.