The 36H Group is in preliminary discussions about creating a databank for the peer-to-peer lending sector and wider alternative lending space.
Under regulations introduced in December 2019, the whole P2P sector reports data quarterly to the Financial Conduct Authority (FCA) but the FCA does not publish this.
The now-defunct Peer-to-Peer Finance Association originally mandated its members to publish loanbook data but its successor trade body, the 36H Group, did not.
Mike Carter, head of platform lending at the 36H Group, said he wants to fix the issue of a lack of publicly available data in this space and is talking to stakeholders about a possible databank showing the loan volumes lent through the sector to demonstrate its worth.
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He said that 36H Group members are happy to provide data for a confidential central database, but he hasn’t yet discussed it more widely and is just trying to see who could run it.
“What I’ve found over the course of the last 15 months in the role of Innovate Finance and the 36H Group is unsurprisingly everyone wants to get some content for P2P and the wider alternative lending sector,” Carter said.
“Various stakeholders want to understand the contribution of the alternative lending sector to the small- and medium-sized enterprise financing market but the data is not there to support that.
“And people want to know the relevance and size of the sector and trends such as whether it’s growing, but the data just isn’t there.
“It’s something I’m looking into to see if we can fix it. We are thinking how we can bring the data together to have a single coherent source of not just P2P but the wider alternative finance market.
“It needs a central point and that’s something I’m talking to various parties about seeing whether we can crack that nut.”
Carter said the primary data point would be loan volumes written within the last 12 months, followed by the current stock of loans, what volumes were written in 2021 and what are outstanding.
He added that returns and default rates would likely not be provided as returns are available on platforms’ websites and he doubts lenders would want to volunteer default rates as these are often confidential information.
“In an ideal world we would have data for the whole alternative lending sector and slice it into P2P consumer, business and property and different stakeholders,” Carter said.
“That’s the target and I don’t know yet where we’ll get. My feeling is loan volume data would really help stakeholders to get a good feeling of the P2P sector and wider alternative lending sector.
“A number of alternative lenders have been involved in the coronavirus business interruption loan scheme and recovery loan scheme and stakeholders need numbers to demonstrate the importance of the sector.
“Additional benefits would be when lenders are looking for institutional funding because institutional funders want to know the relevance and size of the market.
“And if you’re a retail investor I think it’s always useful to have a picture of whether the platform is growing and how fast.”