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
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.
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
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
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
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.
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?
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