The Election Result Is Boosting P2P Lending
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Crowd2Fund's CEO recently expressed strong views on the subject of industry news and forecasts, so we invited him to write about them on 4thWay. 4thWay's editor (Neil here) added in subtitles and lightly edited.
The election result helps the P2P industry grow rapidly
Crowd2Fund* is planning rapid expansion during 2020 due to the decisive election result, which has already begun to bring certainty and direction back to the UK sector.
Already we have seen an immediate uplift in business and investor confidence, with more applications for funding in the second week of January 2020 than ever before. We have received £4.25m of business funding applications which is an estimated 30% uplift on the average weekly applications.
UKfirms must make the most of the low value of sterling by reaching out to international investors and money markets looking to invest in the UK, now there is a clearer direction in the foreseeable future.
The UK has the skills for operating international P2P lending platforms
I consider the UK to be the most dynamic ecosystem for the growth of thesector due to the regulatory environment, talent and available to launch and scale a business. Last year saw a record increase in tech start-up investment from £3.1 bn to £10.1 bn, despite Brexit placing the UK 3rd globally after the US and China.
Uniquely, London is a top financial centre but also a leading technology centre globally. Crowd2Fund are headquartered in London not only because it is a global tech centre, but because London provides the perfect launchpad into other markets.
With London's geographical proximity to the US and Europe, historical ties to many other markets and initiatives born out of London such as the Global Financial Innovation Network (GFIN), it is perfectly placed. The GFIN network, currently chaired by the, looks at cross-border regulatory alignment across 35 different markets. It involves many well know global industry bodies, such as the World Bank and the IMF. It provides the perfect internationalisation roadmap, led by regulators.
P2P lending now tested through full credit cycle
Thesector is critical for our long term domestic and international prosperity, with the growing demand for from entrepreneurs, government initiatives and technology being the key drivers.
TheP2P industry has now been well tested through enhanced regulations and a full credit cycle. [I think it's a bit much to say P2P is “well” tested through a complete cycle of economic downturns as well as good times. I'd rather say the evidence is building – Neil.] It's generating many millions of pounds for investors who would otherwise be stuck with a limited choice of more mainstream markets, with traditional investing methods.
The industry is still nascent compared to the global financial sector. For example, according to the Bank of England,lending including property is an estimated £60 bn per year, while alternative finance accounts for less than 10% of this.
Similar to new media in the 1990s, alternative finance will become our norm and an indispensable utility globally over the next decade. It’s immensely exciting for us to be part of it.
The opinions expressed in this article are those of the external, guest author.
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