2016 Industry Summary
- The year started with Lending Club in the US, CEO Renaud Laplanche was fired over internal investor disclosure misdemeanors, the shares fell to over half of IPO value and have remained there ever since
- Platforms in the US have seen a reduction in loan volumes and a rise in loan default levels
- Back in the UK, Investors who have chosen to invest via UK P2P investment trusts listed on the stock market, rather than directly on platforms, have seen these investments trading at up to 30% discounts to NAV. Some investment trusts have been resorting to share buy backs to narrow that discount
- There were two very successful securitisations of P2P loans originated from both Zopa and Funding Circle
- April 2016 the Innovative Finance ISA came into being but no platforms at that stage had the full authorisation required in order to offer the IF ISA
- The FCA is slowly starting to fully authorise P2P platforms, some of whom went the direct authorisation route and some who have come through the Interim Permission route
- Noticeably none of the members of the P2P Finance Association, including 4 of the biggest P2P platforms, have yet to gain full authorisation
- Lord Adair Turner, a one-time naysayer of the P2P industry, did a u-turn and admits during his keynote speech at the industry’s Lendit Conference in September that platforms can play an important role in the financial marketplace and that they are able to perform underwriting at least as well as traditional bank lenders whilst offering superior customer service
- In November, Zopa announced they will launch a digital bank in 2018
- Then two weeks later, Zopa limits lenders deposit funds on their platform for the first time, too much money, not enough loans?
- And to round the year off, in December, the FCA released their interim response of the review of the Crowdfunding and P2P lending industry outlining their thoughts for 2017 and beyond. To read our summary of this click HERE
2016 Proplend Summary
- In response to lender feedback, Proplend decided to lower the minimum loan investment amount from £5,000 to £1,000. New loans to the platforms are now split in £1,000 units.
- The outcome of this has seen an uplift of 550% of new investor registrations on the platform
- In September, the Proplend founding shareholders bought out GLI Finance Limited
- Proplend appointed Rupert Cottrell as Chairman, Rupert was the ex-Chairman of Thin Cats who saw it successfully sold to ESF and has a wealth of experience in both Financial Services and Regulation
- Proplend received the highest Platform rating from 4thway, an online P2P platform rating agency, based on investor risk and returns. Proplend was one of only three platforms in the UK to receive this top rating
- Andrew Pinfield joined as Head of Risk and Operations, Andrew has 20 years of property finance experience from RBS from loan origination through to loan work outs
- Two additional team hires were Andrew Wood on the Investor side and Richard Coleman on the marketing side, who are both valuable additions to the team
- Over the year we have been nominated three times for best P2P platform 2016 by various industry participants and are very proud to have won two of these
- We are currently in the process of launching ‘Proplend Eye’ – a product specifically developed to allow Pension Administrators to manage their beneficiaries accounts and Wealth Managers to set up and manage their own client accounts
- Two borrowers made full loan repayments, both having executed the business plans they advised us of when they made their initial loan application
- And importantly, Proplend has made it through another year with no borrower arrears or defaults, we are working very hard to maintain this record
Proplend looking forward to 2017
- 18 reasons why an investor should consider P2P lending within their investment portfolio
- Proplend believes that we are very close to achieving full FCA authorisation, which would allow us to roll out our IF ISA in Q1 2017
- We are in the process of building a healthy waiting list of investors looking to open an IF ISA when available. Click HERE if you would like to be added to our waiting list
- We have built a very healthy deal pipeline which will be coming to the Platform in early 2017, subject to DD, valuation and legals.
Finally, I would like to take the time to thank all of our Proplend investors for their continued support throughout 2016, as well as new investors who we have welcomed on board. We have hopefully shown that not being the biggest of the platforms can be a virtue, with the quality of our product and consistent results being recognised. This will remain at our core as we grow the business in 2017 and beyond.
The team at Proplend would like to wish you and your families all the best for the holiday season and a very successful 2017.
