An Update from Ireland

By AltFi on Monday 10 November 2014

Alternative Lending

At the start of 2014 Simon Deane-Johns – who played a part in founding the world’s peer-to-peer lending platform Zopa – predicted a surge in Irish peer-to-business lending activity.

Mr. Deane-Johns is being made to look increasingly clairvoyant. It was roughly a month ago that we reported the launch of Grid Finance – a new, well-backed Irish SME facing peer-to-peer platform. Now we’ve received word that Linked Finance – the nation’s largest peer-to-business lender – has just surpassed the €5m mark in cumulative lending. Having launched back in March 2013, the platform has been spearheading the alternative finance movement in Ireland from its base in Dublin.

Peter O’Mahony, Founder of Linked Finance, weighed in on the achievement:

“Today is a key milestone in our own growth but more importantly in the continuing confidence in peer-to-peer lending in Ireland.”

“With the economy in growth mode again companies of all sizes are focusing again on their capital investment.  Crucially they need to move rapidly to avail of opportunities in their markets and traditional landing is simply too slow.

Linked Finance plans to help over 5,000 SMEs to the tune of €250m in the next three years and based on current economic growth, we have plans to lend at least €30m in 2015.”

That kind of growth would in fact surpasses the forecasts of Mr. Deane-Johns – who as mentioned suggested in January that P2B lending in Ireland could grow by €100m by 2017. When that prediction was made, Linked Finance had facilitated €1.7m for 57 SMEs.

Activity is also under way in Northern Ireland, where the recently launched CoFunder has now secured regulatory backing from the FCA. The launch (which was in fact more of a re-brand) of Grid Finance last month came accompanied with a promise from the platform’s Chief Executive – Derek Butler – that Grid Finance would adhere to best practice in the UK market. CoFunder has gone a step further – following the lead of Estonian consumer lender Bondora in seeking official approval from the UK-based regulator.

Aidan Doherty, CEO of CoFunder, explained the significance of regulation:

"We think it's important that this segment of the industry is regulated to both give security and to ensure there's a firm foundation there in terms of both the borrowers and the funders.”

"We feel that regulation introduces a level playing field for everybody to ensure the general public can be confident."

The CoFunder platform will allow individuals to lend between €100 and €2,500 to local businesses at self-determined interest rates – à la Funding Circle. The platform has demonstrated that there is an appetite for regulation within the small but promising peer-to-business lending scene in Ireland. A dedicated regulatory regime would be an invaluable boost. 

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