Lending Works closes P2P business
Lending Works has placed its peer-to-peer lending business into run-off, citing changing market dynamics, Covid-19 and waning retail interest.
The platform will no longer be accepting any new money from retail investors, and those who already have money invested in loans via Lending Works will continue to receive repayments from their loans until their balance is fully repaid.
No new loans will be allocated to retail investors.
“The dynamics of the P2P market have changed markedly in recent years, with retail investor participation steadily waning,” said Nic Harding (pictured), co-founder and chief executive of Lending Works.
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“This has been exacerbated by the Covid-19 pandemic, to the extent that we no longer feel it is large enough to support a mainstream lender such as Lending Works. We now need to utilise alternative funding sources to ensure that we can provide our loan customers with the service they need.
“As a result, we’ve decided to close our retail investor product and move into a ‘run-off’ process.”
Lending Works was founded in 2014, and has lent more than £240m to fund weddings, car purchases, home improvements and debt consolidations.
Harding suggested that the firm will now turn its focus towards embedded finance solutions.
“We’ve started using Experian’s data to accelerate lending growth without compromising on credit standards,” he said.
“And we continue to deliver the highest levels of customer service, with a net promoter score of +85.
Read more: Lending Works warns of short-time rise in loss rates
“Demand for embedded finance is growing rapidly and it’s expected to accelerate over the next few years as brands recognise the benefit of leveraging our technology and benefitting from exceptional customer experience.
“Now that we’ve moved to an institutionally-funded business model, we’re well-placed to keep up with this demand. We’ve already achieved so much, but we believe there is still a long way to go.
“Thank you to all the retail investors who chose to invest in personal loans on the Lending Works platform.”
Read more: Funding Circle to review retail P2P in June