UK P2PFA: Peer to Peer Lending Tops £3.1 Billion in 2017, Q4 Sees Considerable Growth as Borrowers Shift to Online Lending

The UK Peer to Peer Finance Association (P2PFA) has published aggregate fourth quarter data for of 2017 for its member platforms. The P2PFA shows that during 2017 £3,145,098,842 in peer to peer loans were facilitated. Cumulative lending transacted through P2PFA member platforms exceeded £8 billion.

Robert Pettigrew, Director of the P2PFA, said the final three months of 2017 generated significant growth in new lending transacted through the P2P lenders.  More than a quarter million consumers and businesses currently have peer to peer loans with £836 million in new borrowing occurring during the quarter.

“At a time when the approach of more traditional lenders, particularly to small businesses, comes under increasing scrutiny, the peer-to-peer lending sector has a positive story to tell which continues to drive marked levels of growth in borrower and lending volumes,” said Pettigrew. “The narrative underpinning 2017 for most P2PFA member platforms was one of sustained momentum consolidating collectively this most significant part of the alternative finance landscape as a lender of choice for consumers and businesses, as well as offering an investment product to attract the interest of a significant number of investors. It is noteworthy that, even though P2PFA members have facilitated significant growth in lending volumes over the course of the last decade through their platforms, default rates remain low, which underscores that their emphasis on credit quality is unrelenting.”

Peer-to-peer lending has been a regulated financial service since April 2014 – involves direct matching of funds between investors and borrowers through an on-line platform. Investors range from retail consumers to institutional investors as well as the government. Borrowers span the spectrum with  consumers, small businesses, property developers and buy-to-let operators using these Fintech services. The P2PFA notes that peer-to-peer lending platforms match investors and borrowers directly for a fraction of the cost of traditional financial services entities, providing benefits to customers on both sides of the transaction.

Funding Circle became the largest peer to peer lending in 2017 surpassing Zopa which is a close second.

The P2PFA was established in 2011 as a representative and self-regulatory body for debt-based peer-to-peer lending. P2PFA members are required to meet robust standards for the transparent, fair and orderly operation of peer-to-peer lending. The member platforms do not represent the entire online lending industry but are representative of most of the largest P2P platforms. Current members include: Crowdstacker, Folk2Folk, Funding Circle, Landbay, Lending Works, Market Invoice, ThinCats and Zopa.

The table below shows aggregate levels of peer-to-peer lending by P2PFA platforms during 2017.

       
Q1 2017Q2 2017Q3 2017Q4 2017
Cumulative lending£5,708,635,402£6,391,925,730£7,168,727,657£8,033,329,880
o/w lending to businesses£3,487,208,822£3,924,226,666£4,440,151,180£5,039,000,838
o/w lending to individuals£2,221,462,580£2,467,699,064£2,728,576,477£2,994,329,042
Base stock of loans (outstanding loan book)£2,497,408,800£2,745,490,796£2,958,326,435£3,258,708,518
o/w lending to businesses£1,470,605,094£1,630,765,546£1,754,510,098£1,971,666,313
o/w lending to individuals£1,026,803,706£1,114,725,250£1,204,816,337£1,287,042,205
New Lending£703,047,838£666,096,755£733,270,490£836,982,950
o/w lending to businesses£447,074,032£419,818,940£472,393,077£571,229,385
o/w lending to individuals£255,974,806£246,277,815£260,877,413£265,752,565
Capital repaid£401,358,998£411,834,014£508,891,428£551,968,213
o/w lending to businesses£253,832,226£253,477,742£337,105,103£369,441,516
o/w lending to individuals£147,526,772£158,356,272£171,786,325£182,526,697
Net Lending Flow£305,679,840£254,262,739£228,055,356£277,677,738
o/w lending to businesses£197,231,806£166,341,195£138,964,268£194,451,870
o/w lending to individuals£108,448,034£87,921,544£89,091,088£83,225,868
Number of current lenders128,000140,098134,658138,829
Number of current borrowers214,631231,189246,813263,110
o/w are businesses34,56639,04343,42548,834
o/w are individuals180,065192,146203,388214,276

       
Q1 2017Q2 2017Q3 2017Q3 2017
Crowdstacker£35,209,322
Folk2Folk£139,344,302£176,419,805£191,918,805
Funding Circle£1,830,397,245£2,158,457,107£2,747,357,362£3,093,910,983
Landbay£43,142,119£43,975,419£59,561,822£82,627,314
Lending Works£39,368,050£48,864,686£71,699,386£83,183,353
MarketInvoice£837,793,900£918,450,994£1,201,857,191£1,366,252,414
ThinCats£211,446,000£226,981,000£254,955,000£269,082,000
Zopa£1,926,038,724£2,172,561,894£2,656,877,091£2,911,145,689
Total£5,708,635,402£6,391,925,730£7,168,727,657£8,033,329,880

 

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