Lending Review

Alternative Lending

Top 5 UK P2P Platforms by Market Share Rank

Platform

Last 3 Month Market Share

Month to Date Volume

Cumulative Origination

1

Zopa

19.63%

£14.4m

£891.m

2

RateSetter

18.64%

£16.7m

£658.3m

3

Funding Circle

17.78%

£17.9m

£671.m

4

LendInvest

11.55%

£.m

£321.7m

5

Market Invoice

10.67%

£8.m

£416.5m

Source: www.altfidata.com

Funding Circle is leading the pack thus far in June with over £17.9m in lending to SMEs. According to recent Funding for Lending Scheme (FLS) numbers published by the Bank of England, net bank SME lending rose in Q1 2015 to £600m whilst peer to peer lenders financed £338m over the same time period. Such figures suggest a welcomed expansionary credit environment as alternative finance offers further diversity in sources of capital for UK businesses. 

The Liberum AltFi Returns Index (LARI) is a time-weighted index representing a trailing 12 month return for investors in marketplace lending in the UK. The return for investors, as of May month end, reads at 5.19% an increase from 5.15% in April. The current LARI return is even more impressive in context of the average 2Yr Term bank deposit rate, which stands at 1.69% according to the Bank of England, although it must be noted that P2P investments bear greater risk.

One factor contributing to growth in origination volumes is based on platforms exploring risk/return profiles for different types of investor specifically retail and institutional investors. AltFi Data have recently published an analysis piece that offers an interesting insight into the gross lending rates offered to investors at Zopa, Funding Circle and RateSetter and takes a closer look into how these rates have been affected by the deployment of institutional capital. The Liberum AltFi Volume Index which tracks UK alternative finance industry origination volume surpassed the £1bn in YTD volume originations in the days leading to the end of May. Moreover, the P2P Consumer and P2P Business sectors have blasted past the £1.5bn mark in cumulative origination. The industry continues on its astounding high growth trajectory.