P2P lending predicted to shift towards niche products
Peer-to-peer lending could shift to more niche and specialist products to survive and compete with traditional finance, an industry analyst claims.
Martin Christensen, founder of the P2PMarketData blog, which tracks P2P loanbook sizes across Europe, said the nature of the industry is transforming.
His comments came after P2P industry giants Zopa, Funding Circle and RateSetter have all exited retail lending in recent years.
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He suggested the recent exits of these big brands shows that when platforms reach a certain loanbook size in the UK, another business model becomes more profitable.
Christensen said this may leave smaller-sized lenders but there are still benefits to growing a loanbook.
“The story of the ‘big three’ leaving P2P marketplace lending in the UK does not necessarily tell us that there are benefits for UK marketplace lending platforms to stay small – it is still very relevant for marketplace lending platforms to grow the size of their loanbook,” he told Peer2Peer Finance News.
“However, in the future, I think we will see more platforms all over Europe becoming more specialised and with a focus on providing a solid risk and return ratio in a specific niche or type of financing product.
“This is seen with CrowdProperty that focuses exclusively on development loans for UK developers so it can provide an extended partnership with less friction compared with the traditional finance industry.”
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