Alternative finance pioneer denies attempting to offload peer-to-peer holdings

By Roger Baird on 5th August 2019

P2P/Marketplace Lending

Aim-listed GLI Finance co-founder Andrew Whelan says he has not been offering fintech holdings to rivals for free.

Alternative finance pioneer denies attempting to offload peer-to-peer holdings
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London-listed alternative finance provider GLI Finance has denied attempts to offload its peer-to-peer lending platforms.

The Guernsey-based lender, which invests in several platforms, has offered a number of its holdings to rivals for free, according to a report in The Sunday Times.

The move comes as the industry falls under increasing scrutiny following the collapse of peer-to-peer lender Lendy, which slide into administration in May with £160m in outstanding loans and with more than £90m in default.    

This prompted a clampdown on these firms by City watchdog the Financial Conduct Authority (FCA) in June, including new rules that retail investors should commit no more than 10 per cent of their available funds to these platform lenders.  

Aim-listed GLI Finance owns a unit called Fintech Ventures, which operates a number of platforms such as Funding Options and Trade River. In May, GLI Finance said an unnamed platform inside Fintech Ventures was “facing significant financial difficulties and requires immediate investment to continue trading”. 

 

Writedowns

At the time, GLI Finance said it would write down the value of its investment in the programme to zero, representing a £1.9m fair value adjustment. 

GLI Finance, which is run by chief executive and co-founder Andrew Whelan, has seen its share value from a peak of 64p in 2015 to 4p in early morning trading today. The business is a pioneer in the area of finance, first listing on the London Stock Exchange in 2007.

However, Whelan told AltFi: “We have not been trying to offload any firms we hold stakes in for free. We have minority holdings in a number of fintech businesses, and we have been trying to find outside finance for some of the companies in the portfolio.”

Peer-to-peer lenders, which links small investors to businesses and individuals looking to borrow, grew in the wake of the 2008 financial crisis as banks cut back on their small business lending. 

These platforms claimed their lean automated lending allowed them to offer low rates to borrowers with returns of 10 per cent or more at a time when Bank of England interest rates remain at close to historic lows at 0.75 per cent.

 

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