The P2P segment of the Liberum AltFi Volume index, which tracks the volume of loans originated by UK P2P lenders, hit the £1.5bn mark over the long weekend and currently stands at £1,503,849,640. The staggering growth of the industry is highlighted by the fact that this cumulative volume figure only passed the £1bn pound mark in late December 2013, meaning that the industry has grown by 50% in just five months. AltFi Data has been tracking the sector’s growth closely, and reported the news that the alternative finance sector as a whole had smashed through the billion pound barrier in Janaury. The latest figures indicate that the peer-to-peer sector’s growth rate continues to increase. If the rate of growth tracks along the same trajectory, AltFi Data estimate that the Liberum AltFi Volume index could reach £2.75bn by the end of the year, showing 175% growth.
Sam Griffiths, the newly appointed Managing Director of AltFi Data, commented on the news:
"The £1.5bn headline figure is a major milestone for the rapidly growing P2P Lending industry in the UK, but perhaps more important is the fact that almost a third of those loans have been originated in 2014, underlining the phenomenal growth of the industry."
According to Griffiths, impending ISA inclusion and the sector's inclusion within the FCA’s regulatory regime are two factors that might help in explaining the sector’s accelerated growth.
"The government is clearly doing its best to get behind the peer-to-peer phenomenon – with talk of a bank referral system also looming large on the horizon."
Another sign that the sector is coming of age is the imminent IPO of the first listed closed fund, P2P Global Investments – that will invest across the peer-to-peer lending space. Simon Champ, CEO of Eaglewood Europe, the fund’s manager, observed that:
"The model is proven, direct lending is now growing very quickly and the leading platforms are just beginning to take share from the traditional high cost banks, but there is an awful long way to go and institutional capital alongside retail capital will provide the accelerant to the disintermediation juggernaut."
The below table, supplied by AltFi Data, shows the platform diversification within the Liberum AltFi Volume index. Whilst almost 75% of volume goes through the top four platforms, there are fourteen platforms that have contributed to the growth, with many of them having only started trading in the last year.
Platform
Sector
2014 Market Share
Zopa
P2P Consumer Lending
21.66%
Ratesetter
P2P Consumer Lending
19.25%
Funding Circle
P2P Business Lending
17.80%
Market Invoice
Invoice Financing
14.46%
Wellesley & Co.
P2P Business Lending
6.22%
LendInvest
P2P Business Lending
5.26%
Platform Black
Invoice Financing
4.51%
ThinCats
P2P Business Lending
3.79%
Assetz Capital
P2P Business Lending
3.59%
Folk 2 Folk
P2P Business Lending
1.66%
Saving Stream
P2P Business Lending
0.59%
FundingKnight
P2P Business Lending
0.52%
Abundance Generation
P2P Business Lending
0.43%
Rebuildingsociety
P2P Business Lending
0.27%
