The Small Town P2P Pioneers

By AltFi on 2nd June 2014

P2P/Marketplace Lending

Ascendant peer-to-peer lender RateSetter has produced some fascinating insight into who is using the platform and why.

The Small Town P2P Pioneers

While lending activity within the major cities remains rife, a study of RateSetter’s users has revealed that Royston in North Hertfordshire has lent the most money per capita in the UK. Despite being home to a population of just 16,000 – the town has lent approximately £1.6 million via the platform since October 2010 – £100 each. As you can see from the tables below, London and Bristol are still leading the way in terms of total money lent, but several of the smaller towns boast impressive loan amounts that are disproportionate to their size.

RateSetter also shed light on what motivates borrowers to make use of the platform. The highest single rationale for taking out a p2p loan is to purchase a car (20%), followed by home improvement (17%), debt consolidation (17%), holidays (4%), weddings (3%) and business loans (2%). But the largest portion of loans (37%) are taken out for a category simply described as “other” – which encompasses a diverse spectrum of uses ranging from hearing aids and other medical expenses to home cinema systems.

Rhydian Lewis, Founder and CEO of the platform, commented:

“Our study shows that the UK is fast becoming a nation of people lending to and borrowing from each other without the banks taking a cut. It is great to see the phenomenon that will fundamentally change the way we save and borrow is being driven by savvy savers in large cities, who know the best way to earn a higher income from their savings.”

“And it is also edifying to see the peer-to-peer revolution has won the heart of small town Britain, where a decent return on savings was never needed more. This is a sign of how far lending and borrowing in the UK has changed – and will continue to in future.”

“We look forward to repeating this study later in the year to see how these patterns continue to evolve, and the impact of FCA regulation.”

Finally the survey delved, as many surveys seem to be doing at the moment, into what might draw further investors into p2p lending in the future. RateSetter found that nearly a third of people nationwide (31%) would be more likely to invest via a p2p platform if they could do so through a NISA. According to Cormac Leech’s keynote presentation at the AltFi Summit in March, the advent of P2P NISAs is expected to increase the market size to around £45 billion over the next 10 years.

Top 10 towns/cities by money lent out through P2P

City/Town

Total Loan Amount

London

£11m

Bristol

£1.8m

Royston

£1.6m

Birmingham

£1.4m

Braintree

£1.05m

Worcester

£940,000

Preston

£895,000

Norwich

£755,000

Nottingham

£742,000

Brentwood

£677,000

Top 10 by average value of first deposit

Town

Average deposit

Bruton

£185,500

Ballinasloe

£100,000

Brixham

£83,500

Faringdon

£55,000

Little Waltham, Chelmsford

£50,000

Broadstone

£40,000

Edinburgh

£40,000

Colyton

£30,000

Droitwich

£30,000

Shetland

£29,000

Top 10 towns/cities for car loans

City/Town

Total number of loans

London

3,725

Manchester

1,259

Birmingham

1,179

Bristol

1,077

Glasgow

1,039

Nottingham

951

Leeds

804

Liverpool

751

Sheffield

737

Leicester

729

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