- New providers will enter the market, with the
possibility that one will be a well known brand
- An existing provider will exit the market
- Peer-to-peer lending will exceed £180million
of outstanding loans
- Bad debt rates will increase slightly
- New products will be introduced
New providers will enter the market
The last two years have been no less than seven new
entrants to the market, so it is a safe bet to predict
other new entrants. However any new entrant will
have to persuade lenders that their value proposition
is better than their competitors and this is becoming
increasingly difficult in a crowded market.
In 2012 there have been no less than six new entrants.
The new entrants include
One Stop Funding in February,
The Lending Well in April, Squirrl.com in May, Buy2Let
Cars in June, and
Funding Knight and ReBuildingSociety in September.
An existing provider will exit the market
There has already been one casualty and with differing
successes in obtaining both attracting and retaining
lenders and borrowers, some companies will struggle.
This was realised in March with
disappearance of BigCarrots. In April Danesfield
stopped accepting new loans.
Peer-to-peer lending will exceed £180million of outstanding
The last year saw the breaking of the £100million
barrier and with the large year-on-year growth being
experienced then we may see £180million in outstanding
loans. This would represent a 70% year-on-year
growth if achieved.
This was realised in November when P2P loans reached
£183million and by December there were just over £200million
in outstanding loans, representing a 90% year on year
Bad debt rates will increase slightly
We have already seen some increases in bad debts,
so it is also a relatively safe bet that with the current
economic climate that these bad debts will continue
to rise. We are not predicting a massive rise,
as if this were to materialise this would threaten the
entire peer-to-peer lending industry.
There has been an increase in
bad debt at RateSetter and Funding Circle, but these
are still well below
estimates. We have also seen large increases
in bad debt at YES-secure (Encash) and these are significantly
New products will be introduced
There are fixed rate loans, but this could be extended
to variable or tracker. There could also be personal
loans secured on assets, or something completely different.
This was realised in February with the
RateSetter 18 and 24 month loans which use an innovative
1 year fixed rate bond. In addition in April
a new provider called The Lending Well offered