Over half of investors in European peer-to-peer lending platform Bondster expect the sector to grow this year.
In a survey of 513 of its investors, 51 per cent said they expect the P2P market to grow in 2021, 35 per cent predict it to stagnate and only 14 per cent thought the market would decline.
89 per cent said they would maintain or even increase the amount of funds invested in P2P.
Only nine per cent said they would reduce their investments, and less than two per cent said they would not invest in P2P this year at all.
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The majority (82 per cent) of Bondster’s P2P investors said they use the platform to invest in loans with lower yields, but which are secured by a piece of real estate.
The survey revealed the platform’s lenders are cautious and diversify their investments.
Almost 70 per cent use several P2P platforms simultaneously and most of them also put their money into traditional savings products such as savings accounts, pension funds and building society accounts.
Only 10 per cent said they did not put their money into any traditional savings products.
“Diversification of investments is a very important and effective tool for mitigating the risk of loss,” said Vladimír Vála, financial analyst at Bondster.
“In practice, it means that investors do not put all their finances in one particular investment but rather spread it across the board.
“Moreover, we advise our investors to diversify their portfolios elsewhere. They should not direct more than a third of their funds in P2P lending, and even this third should be diversified among several loans and loan originators.”