By Aisling Finn on Friday 1 May 2020
This is the first time the Cornish company has turned a profit in its seven-year history.
Cornwall-based peer to peer lender Folk2Folk reached profitability in 2019, according to its full-year reports released yesterday.
The platform closed the 2019/2020 year with a £198,000 profit, compared to a £535,000 loss in the previous year.
Folk2Folk says the change of its fortune came mainly from “stringent cost-cutting exercises” introduced by its managing director Roy Warren, who took the reigns just shy of a year ago following the exit of former CEO Giles Cross, who had only been in the role for 16 months.
Warren, who had been the platform’s Head of Risk & Loan Portfolio, implemented a regime of “greater fiscal vigour and discipline to the operations and management of the platform.”
Warren said: “Platform profitability has become increasingly important, not just for the FCA, but for retail and institutional investor decision-making. Many view it as an indicator of whether a peer to peer platform is viable and has a sustainable future.”
“Achieving profitability despite the market-impacting forces of Brexit, the election and now coronavirus is a significant breakthrough for the company and testament to our team’s commitment and our customers’ loyalty,” he added/
Since the start of the coronavirus crisis, Folk2Folk has facilitated £8m of loans and investments, bringing the total lending volume to over £350m.
The lender also revealed it has applied to the British Business Bank to become an accredited CBILS lender and is currently waiting to hear the outcome.