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Predictions for 2013

  1. Peer-to-peer lending will arrange £¼billion in new loans
  2. Funding Circle to overtake Zopa by active loans
  3. More providers will enter the market, with the possibility that one will be a well known brand
  4. At least one existing provider will exit the market
  5. Peer-to-peer lending will get far greater press coverage

Other predictions

Tick1. Peer-to-peer lending will arrange £¼billion in new loans

A quarter of a billion pounds is a lot of money, but at the current rate of growth £250million of new peer-to-peer loans should be arranged in 2013.

This was realised in August as the rate of growth in this sector continues to rise.  By then end of 2013 £½billion of new loans were arranged.

2. Funding Circle to overtake Zopa by active loans

Zopa started the concept of peer-to-peer lending in 2005 and Funding Circle became the fourth UK P2P company to launch in 2010, but by the end of 2013 it could overtake Zopa as the company that have the greatest value of active loans.

This was always going to be an optimistic prediction, but certainly possible given the growth rate of Funding Circle within 2012.  However in 2013 Zopa launched their Safeguard product which has accelerated their growth and maintained a distance between themselves and Funding Circle by outstanding loans.

Tick3. More providers will enter the market, with the possibility that one will be a well known brand

Last year there were no less than seven new entrants to this market, which was more than double that of 2011.  None of these new entrants have yet threatened the position of the top four, so this market is proving a difficult one to crack.

There has been a doubling of new entrants into this market with no less than seventeen companies launching within this sector.  Some of these new companies are growing at a huge rate and may break into the top four within the next year.  While there has not been a household name entering this space there was talk of Santander being in discussions with Funding Circle, and Nicola Horlick launched the Money&Co. brand and the company itself will launch in 2014.

Tick4. At least one existing provider will exit the market

Last year there were two companies that failed and there are others that are struggling to attract borrowers or lenders, so it is highly likely one of more of these will fail.

No companies have formally announced their withdrawal from the sector, but two companies have failed to make any significant number of loans within 2013 and their loan books are decreasing.

Tick5. Peer-to-peer lending will get far greater press coverage

This is difficult to measure, but we would expect more TV, broadsheet and tabloid coverage.

There has been a lot of press coverage on peer-to-peer lending, and the FCA published a consultation paper on crowdfunding - including peer-to-peer lending - where the P2P money website also provided some inputs.  This paper attracted a lot of media coverage and there was a recent speech within the house of commons on this very topic.