P2P Weekly: UK P2P Record

Welcome to P2P Weekly, our weekly roundup of news in the peer to peer, crowdfunding and financial world that you simply can’t miss.

“UK Peer To Peer Finance Breaks New Record,” Forbes

The eight largest peer-to-peer lenders in the UK made £507.4m worth of loans in the second quarter of this year, breaking records once again for total lending in the sector.

“We have passed yet another milestone with our members facilitating over half a billion pounds of new loans in the last three months – at this rate we may hit £4bn by the New Year,” said Christine Farnish, chair of the Peer2Peer Finance Association. “Strong growth continues across all parts of the market, reflecting the increasing trust that both lending consumers and borrowers have in peer-to-peer platforms.”

“China Crackdown on Margin Lending Hits Peer-to-Peer Lenders,” Wall Street Journal

New pressures from the Chinese government may be squeezing the rapidly growing peer to peer market in the country. Citing a new directive from the China Securities Regulatory Commission cautioning against illegal trading, three leading peer to peer companies have said they will no longer facilitate loans that use stocks as collateral.

The heightened scrutiny is part of a broader effort by the Chinese government to stabilize markets. The Chinese P2P market reached 300 billion yuan (£31 billion) in settled loans in 2014, a substantial increase over the previous year.

“Even more on debt and democracy,” The Economist

“In other words, the debt is owed to the taxpayers of other nations, most of which are democracies. So any write-off of Greek debt can be represented as a loss to voters in other countries. One can argue, of course, that such losses would be notional; experience suggests, for example, that central banks can manage quite well with a hole in their balance sheet. But that is not how such schemes have been sold to voters. German voters were told that the creation of the euro would not involve bail-outs of other countries; that explains why the country’s leaders are so reluctant to let Greece off the hook.”

“Welcome to ‘the biggest change in banking for 400 years’,” Newsweek

A new piece from Newsweek has summarized the substantial benefits of peer to peer lending, calling it a refuge for investors who “like the idea of being on the right side of regulatory and technological upheaval.” Writes Ryan Ross: “P2P lending offers huge opportunities, mainly at the expense of banks, whose biggest margins are traditionally in unsecured lending. Herein is the layer of fat P2P platforms are guzzling, picking off the banks’ best customers. P2P platforms have also proved superior at harvesting and managing big data, and have lower cost bases than banks.”

“Booming Online Loan Marketplaces Draw U.S. Treasury Scrutiny,” Bloomberg

The United States Treasury Department has begun a public inquiry of the peer to peer industry in the country. The department seeks public comments to learn more about how the industry works and different types of financial activity happening within it.

“By soliciting public comments on this relatively new industry, we hope to better understand the potential for online technology to expand access to safe and affordable credit for consumers and small businesses,” Antonio Weiss, counselor to the Treasury Secretary, said in a statement.

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