New research from Apex looks at P2P sector and finds SMEs not just focusing on price

By AltFi on Tuesday 1 October 2013

Alternative Lending

It might be worth catching up with a report released yesterday from Apex Research on the P2P sector - apart from the to-be-expected big numbers picture (P2P lending has apparently exponentially grown to "exceed £1.6bn globally"), the report also looks in depth at the business models operating in the sector and how they might succeed. A quick take reveals two central insights:  

  1. According to Apex "Industry estimates are that the operating costs of a peer-to-peer lending are less than half those of a traditional bank’s personal loans operation – even after including the greater amount of marketing required to evangelise the concept". If so, then traditional finance has much to fear, although we can't help but think that marketing budgets are going to have increase by a massive quantum from hereon in...which might eliminate that advantage!
  2. In the small business loan arena competition is not surely about price or rates with the peer-to-peer lenders differentiating "themselves from the banks are availability of funds and speed of application process".
     

Once we've seen the report in more detail, we'll report back on other key findings.

In the meantime the PR release that goes with the survey suggests that the study also addresses the important questions for the industry, such as: 

  • How is the industry likely to develop as it matures?
  • What is likely to happen once the industry is regulated by the FCA
  • How might the banks respond to its growth and what are the implications?
  • Are forecasts of share of lending which have recently been quoted realistic?
     

The full study: Peer-to-Peer Lending: Market Insight Report 2013 can be found at apex-insight.com/research.

About Apex Insight 

Apex Insight is an independent provider of research, analysis and consulting services covering business services markets in the UK and Europe. In addition to Peer-to-peer lending, it has recently published market reports covering sectors including Debt Purchase and Debt Collection, Consumer Debt Solutions, Internet Payday Lending, Pawnbroking, Home Credit and Rent-to-Buy Retail.

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