Lending Review

By Sukhwinder Shoker on Monday 15 February 2016

Alternative Lending


Funding Circle is thus far leading the charge in February for volume origination with Zopa closely following.


AltFi Data’s analysis into January UK peer to peer volume origination shines light on an overall decline in financing as measured by the Liberum AltFi Volume Index (UK). Monthly volume origination collapsed by almost 10% relative to December’s record month. P2P business lending was the major reason for this drop with a 15% month on month decline. The Online Invoice financing sector saw an even steeper month on month decline (albeit origination volumes were up 80% on last January). It is likely that this is merely seasonal dip - data released by the Asset Backed Finance Association (ABFA) indicates the growing nature of asset based finance in the UK reaffirming the country’s position as a leading innovator. In a key finding from the ABFA, asset based finance -of which 80% is based on invoice financing- supports 15% of all UK company turnover, ahead of an average 10% of the economy across Europe. This will, undoubtedly, contribute to the success of peer to peer invoice discounting models in the UK.


A different story emerged for the consumer lending sector which established a record month of volume origination driven by an influx of new records posted by Zopa, RateSetter, Lending Works and Lendable. However, this growth had not been enough to offset declines in wider volumes over this period across the industry.


Moving onto the Liberum AltFi Returns Index the trailing 12 month return currently stands at 6.19% which is 7bps below the previous month. Some leading platforms in the UK have now released further details with respect to their ISA product offerings and as 6th April 2016 approaches AltFi Data will keep a close eye on returns with the potential of retail money flooding the peer to peer market and deressing rates.

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