Huge growth in UK P2P industry
In a massive boost to the peer-to-peer lending sector, new research from AltFi (Alternative Finance) reveals that P2P lending has now passed £1.5 billion in the UK for the first time, indicating that the sector as a whole has grown 50% in just the five months leading to May this year! Almost a third of those loans originated in 2014 as well.
Assuming this rate continues at the same pace, it could hit £2.75 billion by the end of this year, astonishing growth of 175%. The prospect of good returns is likely to spark confidence in large and small investors alike, and will see even more entering the market. The UK P2P’s market growth reflects similar confidence levels in the USA, which has seen major financial institutions getting involved, Google buying a stake in Lending Club, and the latter company’s recent IPO.
AltFi’s figures show that the concept of peer-to-peer lending is not only appealing to many people and businesses keen to escape traditional funding routes, but also that is is increasingly being seen as a safe investment. This is no doubt in part down to news of the ISA inclusion, and FCA regulation, showing that the UK government is getting behind the industry
In the UK, the industry’s big three are Zopa, Ratesetter and Funding Circle, between which almost 75% of loans flow through. But there is also a host of other platforms servicing different parts of the economy.
Mood within the industry is buoyant – the UK economy is seen by many to be picking up, and with that comes a lot of exciting new start-ups looking for alternative sources of funding. The next 12 months are sure to see more interesting developments and no doubt more growth for one of the hottest developing industries in the country.
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