The P2P platforms that have left retail in favour of institutions this year
Peer-to-peer lending platforms often look to institutional funds to scale, but over the course of this year a number of lenders have opted to focus solely on institutional funding, leaving retail lending altogether.
Industry stakeholders have previously claimed that institutional funds do not threaten retail lenders but are a positive for the sector. For example, panellists at the recent P2P Leaders Forum said it that institutional funding can help platforms to grow and argued that investors should be reassured by seeing institutional funds on a platform due to the thorough due diligence the platform would have completed to have received this.
Meanwhile, Mike Carter, head of platform lending at the 36H Group, has said that scalability is still feasible in P2P as many platforms uses diversified sources of funding to grow.
This shows that although some platforms have left retail in favour of institutional, it is still possible for platforms to grow via diversified funding, and these are beneficial for the sector.
Here Peer2Peer Finance News summarises the platforms that have left retail in favour of institutional funds this year.
Read more: Show me the money! Special report on institutional investment
FutureBricks
In July, FutureBricks completed its transition from P2P lending to unregulated corporate lending after announcing in June that it had decided to leave the retail P2P space because of the regulatory burden impacting the “potential commercial viability of P2P”.
The property investment platform repaid all of its retail lenders to give them an early exit from its three live loans.
The lender is now focussed on growing its business-to-business lending side by onboarding more institutional lenders and then plans to launch Brickway, a one-stop platform for financing and expertise aimed at small- and medium-sized enterprises.
Zopa
Zopa announced on 7 December that it will close its P2P lending operations next month in favour of bank lending and seeking an initial public offering.
The platform, which launched in 2005, has written to lenders to say all investment funds will be returned to holding accounts by the end of January 2022.
Lending Works
After nearly eight years in the sector, Lending Works has placed its P2P lending business into run-off, citing changing market dynamics, Covid-19 and waning retail interest.
The P2P consumer lending platform, which has lent £240.3m to date, will no longer be accepting any new money from retail investors, and those who already have money invested in loans will continue to receive repayments until their balance is fully repaid. No new loans will be allocated to retail investors.