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Lending Review




By Sukhwinder Shoker on 11th April 2016


Top 5 UK P2P Platforms by Market Share

Rank

Platform

Last 3 Month Market Share

Month to Date Volume

Cumulative Origination

1

Funding Circle

21.36%

£13.1m

£1202.8m

2

RateSetter

18.74%

£12.7m

£1136.6m

3

Zopa

18.17%

£9.1m

£1410.5m

4

LendInvest

12.39%

£.m

£611.4m

5

Market Invoice

8.99%

£4.3m

£703.2m

Source: www.altfidata.com                                                  Data correct as of: 07/04/2016

 

The Liberum AltFi Volume Index (UK) jumped by more than £35m in March to a new monthly record of £342.5m with records propping up across the sector.

 

Taking a deeper look into the leading three UK platforms by market share, Zopa originated the least in March with over £48.5m in loan volume when measured against RateSetter’s £57m and Funding Circle’s £62.4m. Zopa’s YTD annualised growth, whilst still impressive at 76% – has been outpaced by explosive growth at LendInvest where annualised YTD loan volume growth currently stands at 120.2%.

 

The peer to peer business lending sector achieved a record month in March with over £185.1m in loan origination. A surge in financing at LendInvest, Assetz Capital and Saving Stream in particular lent itself to a strong month for the sector. Assetz appeared to have previously struggled to scale lending operations in 2015 although with £8.3m invested across the platforms’ products in March, it looks like the online lender may have turned the corner. At the end of February a similar theme had emerged for Platform Black, the online invoice financing platform, which facilitated over £10m in invoice financing. However, last month saw this drastically decline to £1.4m. Growth has been subdued across the sector with Market Invoice seeing only a marginal increase in financing in March.

 

As traditional incumbents have reduced their exposure to SME debt since the financial downturn, the success of alternative forms of lending in the UK will be pivotal to ensure small businesses are able to continue to support plans of expansion and hiring. However, platforms must ensure such growth is sustainable. Whilst abundant data points exist for consumer lending, there is much less publicly available information for small businesses and this is compounded with sometimes sketchy statement of financial results. It takes time to build an extensive database which will ultimately serve to accurately price loans from the large variety of small businesses that exist.

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