The Latest P2P News – 29/7/16

P2P News – All The Latest Updates

 

Hi guys and welcome to our second P2P news edition of the month! As usual, we will be giving you a quick snapshot of the latest news with five key stories. We focus on an array of P2P topics from P2PFA releases P2P lending data for Q2 to looking at how P2P is heating up the world of fintech. Missed our last round-up? If so, catch up here.

 

P2PFA Releases Peer to Peer Lending Data for Q2

P2P News

The UK Peer to Peer Finance Association (P2PFA) recently released its second quarter numbers for 2016.

Their data indicates that cumulative lending now stands at £5.8 billing with £658 million in lending occurring during Q2. last year, (in the same quarter) total new lending registered at£507,936,000. But Q2 numbers are a dip from Q1 2016 when total new lending came in at £715,421,000. Both the number of borrowers and lenders increased from Q1 to Q2. Zopa remains the largest lender by cumulative total followed by Funding Circle. (Crowdfund Insider, July, 2016)

Chair of P2PFA, Christine Farnish CBE mentioned in a recent Crowdfund Insider article that peer-to-peer lending is now a mainstream alternative finance product – continued expansion in the number of investors and borrowers has clearly shown this,more than 150,376 lenders and 332,107 borrowers currently using P2PFA platforms.

ThinCats, which is a P2PFA member, company founder Kevin Caley also shared his thoughts in the article, Mr. Caley stated : alternative finance “is playing a major role in bridging the UK’s business funding gap.”

He is also stressed that although there is still a lot of uncertainties due to the Brexit vote, peer-to-peer platforms won’t be sitting on their hands and will continue to bring disruptive innovations to the market as well as being an alternative to traditional market based lenders.

Read more on the P2PFA research here.

 

UK Invoice Finance Platform, Raises Another £7.2M

MarketInvoice P2P

MarketInvoice, which plays in the peer-to-peer lending space by enabling U.K. businesses to raise money from institutional investors and high net worth individuals by ‘selling’ outstanding invoices, has raised a further £7.2 million. (Tech Crunch, July 2016)

MCI Capital, a listed Polish private equity group as well as existing backer Northzone have been involved with MarketInvoice’s funding – which now brings the total investment to just over £18 million.

The company told Tech Crunch that the raised funds will be used to help sustain its claimed position as the leader in invoice financing in the U.K., and also for product development.

In a nutshell, MarketInvoice works with hedge funds, asset managers, family Offices, and high net worth individuals. In addition, real-time auctions are used to determine how much of an invoice’s value will be provided as capital (minus the bidder’s cut), the company then makes money by also taking a small cut.

To sum it up, they enable businesses (from SMEs to larger companies) to free up money owed before an outstanding invoice is paid, thus providing much-needed liquidity. In turn, it gives investors a new asset class. Invoice finance and other forms of P2P lending play into a narrative that has seen banks reluctant to lend to small and medium-sized businesses and interest rates at a historic low, as Tech Crunch’s Steve O’Hear mentions.

Image source : Tech City News

Governance and Regulations are Key to the Future of P2P

P2P news

 

As mentioned in previous P2P news blogs, governance and regulations are key for the p2p industry, especially in countries such as China which has seen a lot of fraudulent activity (the Ezubao case springs to mind which was briefly mentioned in our last P2P round-up).

So why do we need it? Regulation and governance helps to protect both the investor and borrower, and gives the sector added credibility and will only serve to boost awareness and participation, as Money observer’s Chris Maule points out in an Interactive Investor article.

Here in the UK, measures have already been put in place, the industry here is known for being transparent, for example, the P2PFA make sure its members publish their loan books, reveal bad debt rates and include five years’ worth of credit performance.

The actions of the recent Lending Club case (which you can read about in one of previous P2P blogs) should be a sobering reminder of what could happen if they fail to play their parts in developing a transparent and honest product.

Image source : The Connectivist

P2P Funds Are Unaffected by Brexit vote

Brexit

 

Peer-to-peer (P2P) lenders could stand to gain a greater market share as some banks have reduced appetites to lending in the wake of Brexit, according to Chirag Shah, CEO of Nucleus Commercial Finance. (Bridging and Commercial, July 2016)

Nucleus Commercial Finance’s CEO explained that P2P lenders are at an advantage as investors are less likely to withdraw their funding, this is all linked to some lenders that have begun to lose their funding lines as a result of financial turmoil caused by the recent EU referendum.

FundingKnight‘s managing director Jasper Ehrhardt, also agrees that P2P has been untouched by post-Brexit uncertainty.

His view is that P2P has an added advantage of having access to non-institutional funds, which are unaffected by Brexit and are the underlying drivers for continuing the low level of returns available from more traditional vehicles, such as savings accounts.

In addition, he stresses that the incentive has stayed the same, as P2P continues to see above-average rates of return on platforms, compared to bank and savings deposits.

Read more industry views here.

P2P is Heating up the World of Fintech

p2p fintech

 

We all know about how fintech is revolutionising finance and disrupting the banking sector and never before has the industry seen such a rapid and strong movement until now.

It’s now easier than ever to digitally connect people to money, and P2P lending takes advantage of that, and is growing by the numbers (as previously mentioned in the first news item).

Nikos Antoniade, CEO of easyMarkets, a company specialized in analyzing financial markets, says that the rise of fintech-related technologies is overwhelming, and that despite of all criticism, P2P lending is here to stay. (Tech.co, July, 2016)

With so many segments of fintech, from payments, insurtech, asset management, etc. P2P is definitely one segment that is heating up, as this chart below from Zopa shows.

 

Zopa P2P Graph

 

Image source : Tech.co

 

What Are Your Thoughts?

Which of our chosen P2P stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

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The Latest P2P News – 18/5/16

P2P News – All The Latest Updates

Hi guys and welcome to our very first P2P news blog, just like our property and crowdfunding news blogs we will be giving you a quick snapshot featuring five top stories. Today we look at an array of interesting topics from UK lenders say P2P is safe to looking at some key takeaways from the industry so far.

 

P2P is ‘Safe’, Say UK Lenders

P2P News P2P Lending

 

UK P2P lenders have reassured investors that they are safe despite the calls for tighter regulations.

The P2P industry — in a nutshell involves matching borrowers directly with lenders online — was thrown into the spotlight last week when a high-profile US lender’s chief executive resigned.

Lending Club’s founder Renaud Laplanche, stepped down from his position following an internal probe over allegedly mis-sold loans according to the FT.

As a result UK lenders were keen to distance themselves from the P2P company and also pointed out that regulations involving lenders in the UK differs from the regulations for their U.S. counterparts.

The big difference between the UK and The U.S. is that the UK regulations were written specifically for P2P lenders. In contrast, U.S. lenders follow rules devised before peer-to-peer lending existed as FT’s Aime Williams points out in her article (link below).

P2P in the UK is also known for being very transparent, the industry body for UK p2p lenders, the P2PFA, noted that its members publish their loan books.

In addition P2PFA members follow a number of agreements to enhance transparency levels, including publishing bad debt rates and five years of credit performance, as well as a returns performance and submitting full loan books.

However, some have mentioned that things should go further. For example, Chief executive of AltFi Data, Rupert Taylor told the FT : “People recognise the benefits of transparency, but there’s more that can be done.”

You can read more on this topic here.

 

China : The Red Dragon Reins in P2P Lending

P2P News China

China is tightening its grip on a surge of peer-to-peer (P2P) lending amid a string of mismanagement and fraud in the lightly regulated sector. (The Straits Times, May, 2016)

The point of doing this is to limit the potential instability these lenders might pose to the country’s wider economy and society.

In recent years there has been a surge in P2P lenders in China, mainly from websites that connect borrowers to lenders and according to Chinese data company Wind Information, there were 2,600 platforms at the end of last year.

Lending hit over 980 billion yuan last year, soaring from 253 billion yuan in 2014, making China’s P2P market the largest in the world.

 


Lendix Raises $13.5 million To Become Leading European P2P Platform

P2P News Lendix

The French startup has raised $13.5 million (€12 million) and now wants to become one of the leading European P2P lending platforms.

Lendix was launched last year and in it’s first year has managed €20 million worth of medium-term business loans. According to Tech Crunch, Lendix manages loans for small and medium companies for 3 to 6 years with annual returns between 4 and 9 percent for the lenders.

Lendix is going to expand to other European countries now they have taken the French market by storm, they plan to get involved with the Spanish and Italian markets respectively in the coming months. For each European expansion, the French startup has to work on getting a license to operate on these new markets. In addition, Rules can be slightly different as well. It’s a long and bureaucratic process, however, it is a good barrier to entry for foreign competitors.

You can read more about Lendix here.

Image source : Lendix

 

Why Banks Should Be Offering More P2P & Bitcoin Services For SMEs

P2P News Banks

Banks are facing “stiff competition” from fintechs, and should be offering more “value-added products”, such as peer-to-peer lending, bitcoin and cloud services according to Accenture’s SME Banking 2020 report.

They found there is a clear appetite among many SMEs for these value-added services and this currently represents a missed opportunity. Their data indicated that banks could be generating £1.6bn a year more in revenue from these services, representing potentially £8.5bn by 2020.

Gareth Wilson, Accenture banking practice lead for the UK and Ireland told City A.M. : “SMEs want banks to be more relevant and provide a wider range of business services”.

Moreover, he stressed that banks need to recognise and seize this opportunity. Unless they do, SMEs may take their business elsewhere and look for alternatives.

 

P2P Takeaways

P2P News

Lastly, here are some key P2P takeaways :

  • The P2P lending industry is seeing significant growth, especially in developed countries with strong financial markets. P2P lenders in the US generated $6.6 billion in loans last year, up 128%.
  • Europe is the next big market for P2P lending: The alternative finance market in Europe reached nearly €3 billion ($3.9 billion) in 2014, a 144% jump, and small-business P2P loan volume in France grew almost 4,000% last year, to reach €8.2 million ($10.6 million).
  • The US has one of the largest P2P lending markets in the world by loan volume, but the UK’s is 72% larger on a per capita basis. Low consumer confidence in banks (even before the financial crisis), a high degree of comfort with online platforms, and a positive regulatory environment have all helped nurture the UK’s P2P lending market.

Stats taken from Tech Insider.

What Are Your Thoughts?

Which of our chosen P2P stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now For More Information