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The head of APFA talks to P2PFN
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The new online aggregator for consumers
Using your assets: The benefits and challenges of secured and unsecured loans >> 20
ISSUE 3 | DECEMBER 2016
Altmann: consumers should consider P2P
BARONESS Ros Altmann, the former pensions minister, has said she is “very, very much in favour” of retail investors putting money into alternative finance channels such as peer-topeer lending. The veteran consumer rights champion’s positive endorsement comes at a welcome time for the sector, which is trying to improve public trust and awareness as platforms ready themselves for the Innovative Finance ISA (IFISA). “I’m very, very
much in favour of alternative investing and diversification, particularly for long-term investors,” Altmann told Peer-to-Peer Finance News. “As long as people understand the risks and there are consumer safeguards in place, we should encourage people to diversify. “P2P finance could have a good role, as long as you’re with a good company that assesses who you’re lending to in a responsible way,” she continued. “That doesn’t mean none of the borrowers will fail, but it
does mean somebody is trying to assess the risk properly. That should give you better returns than just sticking your money in conventional bonds, for example. And certainly better than cash.” The launch of the IFISA, the tax-free wrapper around P2P investments, is hoped to propel the industry into the mainstream once the major platforms have received Financial Conduct Authority approval. So far, a dozen smaller lenders are authorised to offer the product, with Lending
Works becoming the first larger platform to gain FCA approval in October. The next stage is to receive ISA manager status from HMRC, but this is broadly accepted to be a formality.
Read the full interview with Altmann on page 12.
Platforms report booming business after Brexit vote PEER-TO-PEER lenders have welcomed a Brexit ‘boost’, which has sent an influx of new customers into the sector in search of better interest rates and accessible loans. Despite a period of uncertainty following June’s vote, the low base rate and depreciating value of the pound meant that September and October were
record-breaking months for P2P lenders across the UK. “We’ve had a lot of success in the aftermath of the Brexit with the base rate cut prompting people to look at their options,” said Luke O’Mahony, PR manager for RateSetter. “We think we’re well positioned to prosper in any kind of environment. We were founded in
a difficult economic environment and we continue to prosper in it.” RateSetter saw twice as many new investor accounts being opened each day in the month after the base rate cut compared to the month preceding it, while Zopa and Funding Circle both broke their own funding records in September 2016.
Assetz Capital had its biggest ever month in October, originating £26m in loans. “Since the Brexit referendum, Assetz Capital has seen record growth in both loan enquiries and investment funds,” said Stuart Law, chief executive of Assetz Capital. “From August, the loan enquiries have been both significant and consistent growth at >> 4