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P2PFA members lend over £450m in Q1 2015

Posted on 01 May 2015 by Chris Torney

It looks like 2015 is going to be the year when peer-to-peer lending really takes off in the UK if the latest industry statistics are anything to go by.

Figures published this week by the Peer-to-Peer Finance Association (P2PFA) show that more than £459 million was lent by platforms such as Zopa in the first three months of the year. Compared with the final quarter of 2014, this represents an increase of almost a third.

If you bear in mind that P2PFA members lent a total of £1.2 billion over the whole of last year, 2015 looks guaranteed to be a record-breaker. According to industry analyst AltFi, there has already been more money advanced via P2P and other sources of alternative finance this year than in the whole of 2013.

Christine Farnish, chair of the P2PFA says: “These numbers are excellent and reflect the strong industry growth into 2015. We are continuing to see strong appetite in the consumer market and a significant increase in lending flow to businesses too.”

It certainly looks like the key message about P2P – better returns than on savings with only a little more risk – is really starting to hit home. But there are also suggestions that alternative finance is starting to take market share from other areas as well.

The latest figures from the Investment Association show that inflows into stocks-and-shares ISAs have been well down this year. Between January and the end of the financial year on 5 April, traditionally the key time for the ISA sector, net sales were just £325 million: that is 57% less than the same period in 2014, even taking into account the new higher £15,000 investment limit.

Could it be that people are increasingly turning their back on the markets and switching to P2P instead?

Whatever the reason, the surging popularity of P2P lending will only add to the pressure on a new government to create a new ISA category.

As Farnish says, “The future decision around how peer-to-peer lending will work within the ISA wrapper remains crucial for the industry this year. It is important to ensure a separate ‘Lending ISA’ is created, a decision that will not only create greater consumer choice, but will avoid any confusion of placing peer-to-peer loans with stocks and shares, a completely different and riskier asset class.”

Like the rest of the sector, Zopa is having a bumper year and April saw the firm outstrip the industry record for monthly lending with over £45 million in loans approved during the month.

Zopa has now lent more than £830 million since it was set up a decade ago and is well on course to breach the £1 billion barrier in the summer.

The alternative finance revolution is now in full swing – let’s hope the next government recognise that with a new ISA.

Category: Industry news
Tags: p2pfa, data

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