Alternative finance firms unfazed by Brexit

Close to 90 per cent of alternative finance executives see their industry continuing to grow or staying the same post-Brexit.

Postgraduate lending fintech Prodigy Finance has published new data suggesting that alternative finance firms are ready to buck Brexit uncertainty.

After surveying 117 senior executives at the AltFi London Summit in March, Prodigy found that 58 per cent of respondents see the alternative finance industry growing post-Brexit. A further 30 per cent expect the industry to remain the same.

“As for Brexit, whilst it may create limits for the UK economy, it is important that companies in our industry look beyond borders and take on a more global perspective. According to the data this change appears to be well underway and resonates with us at Prodigy Finance, which is based on the belief that access to finance should be borderless,” said Oliver Aikens (pictured, centre), head of capital markets at Prodigy Finance.

In general, the sector seems optimistic in the face of macroeconomic risks. 70 per cent of respondents feel that the UK’s alternative finance sector is either moderately or very insulated from potential rate hikes in the US or UK. Just 10 per cent see interest rates as the biggest challenge for the sector. Regulation has emerged as the greatest concern in the alternative finance sector at present, with 40 per cent of the vote.

Respondents also weighed in on where the next wave of capital will come from in alternative finance. 39 per cent are looking to institutional investors for funding, 17 per cent to retail and 11 per cent to family offices and ultra high net worth individuals.

Prodigy is one of the world’s largest fintech firms specialising in lending to students. It nabbed a $40m series C round in August last year, in addition to a $200m debt facility.

Prodigy’s recent Impact Report shows that the firm has funded over 9,900 students of over 120 nationalities over the last ten years, equal to a grand total of $500m. Students from emerging markets make up 80 per cent of the platform's borrowers.