According to Bovill, a regulatory consultancy based in the UK that obtained figures from the Financial Conduct Authority (FCA) which oversees P2P lending domestically, the number of platforms is expected to surge in the near future. According to the figures, more than 100 peer-to-peer lenders have applied for full authorization and 178 companies have interim permission to operate with the FCA reporting to date that only 56 platforms were in operation.
Commenting on the news, Gillian Roche-Saunders, head of venture finance at Bovill said,
“Everyone feels it’s a bit of a land grab now there’s more certainty about the regulatory regime. There are an awful lot of new entrants to the market, including many niche players.”
The boom in new players will continue to add to the growing P2P lending market which reached new highs in terms of lending and participants at the end of Q2 2015 according to the industry’s own body, the Peer-to-Peer Finance Association (P2PFA). While some new players will carve out niche positions, others might struggle and their ultimate demise could hurt growing consumer confidence in the industry thus the announcement that over 100 platforms are seeking authorization is not necessarily a good thing.
For more information on P2P lending in the UK and in the US see Mercator Advisory Group’s research reports, The Disruptive Potential of Marketplace Lending in the U.S. Consumer Credit Market and An Introduction to Peer-to-Peer Lending: A European Perspective released in July and June 2015 respectively.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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