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The Assetz Capital platform is no longer open to investment from individual investors. No new investments into peer-to-peer loans are possible and, as a result, no new funds should be deposited. The existing loan book relating to the Retail platform is now in run-off and this will, over time, deliver the return of capital to investors. Full information can be found here . Existing Retail lenders can still log in, view information regarding their account and loan holdings and operate their account in accordance with the information regarding the run-off provided on the link above. Please see this important message regarding the currency of the information on the pages on this website.

P2P lending - What's in a stat?

P2P lending - What's in a stat?

The growth is well documented, and at times overwhelming. However, stats are only interesting when they’re telling you something and from the numerous reports published, there are clearly a few you tend to take more notice of than others.

NESTA and the University of Cambridge are widely recognised as the authority when it comes to P2P growth figures and have been referenced thousands of times as the interest in the sector has grown.

We’ve picked out three data providers in the sector to give you a little insight in to our thoughts on each because we know that both investors and businesses looking at P2P as a potential finance solution are learning about the young sector through such reporting.

It’s important to understand what they represent, and therefore how complete the picture is, or not.

1) NESTA and the University of Cambridge

Having pieced together numerous, well-considered reports in the past few years, the annual Nesta–led peer-to-peer lending report is widely accepted by those operating in the sector, as the ‘go-to’ for historic stats.

We’ve provided stats, data and various examples of businesses utilising peer-to-peer lending, such as the Equestrian Centre in Milton Keynes, to Nesta on collaborating their annual reports. And we’ll no doubt continue in the future.

Collectively, the latest market figures provided by the report show that £749m was lent in the first three quarters of 2014. It also showed that the size of the alternative finance industry increased from £267m in 2012 to £1.74bn in 2014 – £749m of which was from P2P business lending and a further £547m from P2P consumer lending.

The data is based on historical information - like any accurate report needs to be. Having said that, throwing in anticipated growth rates based on such data can be a little hit and miss when a market is growing so rapidly. But that goes for anyone making a prediction as nobody truly knows how much it will grow, as there are many influencing factors such as the governments plans for the Innovative Finance ISA.

All going to plan, inclusion of the new ISA, in theory, will positively influence the growth of peer-to-peer lending significantly. Couple that with the pressure being put on banks to refer SMEs who may be better suited to peer-to-peer borrowing, and you’ve got the perfect storm for unprecedented growth in the P2P lending market.

This is the end of the spectrum we believe in. Nesta’s predictions are considered, and judging by the growing interest from institutional money and what we are seeing at Assetz Capital, we believe the market will substantially exceed the targets set by Nesta’s latest report.

2) Liberum AltFi Volume Index

Ever since AltFi began, we’ve been close to the team, working with them on various initiatives. Data and the collection of, being one of them.

Now, they have a well presented, easy to follow and manipulate online tool which anyone can use to see which areas within crowdfunding and peer-to-peer lending are growing fastest, which is also broken down by platforms.

It took some time to work out what type of data to collect, and when. Once they had, they were able to set up direct daily feeds from each platform that gives the user the most up to date statistics in the market today.

It’s a very useful tool that is only going to get better, I’m sure.

The commentary around the Liberum AltFi Volume Index is useful but there could always be more in the way of trend analysis, although there is some of this in the news pages too. Being careful not to advise and guide those using the data, you can click and compare sectors or platforms as you wish.

Whether you are an existing investor, or you are considering which type of peer-to-peer model to invest in, the index can be a useful tool to get to grips with which platform is doing what – in number terms.

Of course, combining the knowledge gained from statistics is only one part of a decision process. We believe that all potential investors and borrowers should also read through news, views as well as online forums to get a better understanding of the opportunities. Speaking to the platforms you have shortlisted is also a good idea.

P2P is more than just stats

These are just two of the bigger players who collect and report on peer-to-peer lending statistics as there are many more. And it’s inevitable that other organisations will pop up offering variations on the data and statistics. What is clear is that the analysis and trend spotting of such data is lacking at present. Journalists in publications such as the Financial Times, The Times and the Daily Telegraph are doing a great job of offering independent perspectives on some platforms and information, but more needs to be done to translate this information.

The government and other independent financial advisor groups are talking up the importance of advice in this sector, and we couldn’t agree more. Considering stats and data is one thing, but understanding them against how different platforms operate is another. Some platforms have a calculated approach to growth, while others are spending big on market to ‘land-grab’ customers but data won’t tell that story.

Get to know the platforms through other means, don’t take stats as the be all and end all.

As with much of the investment market, there is risk associated with peer-to-peer lending. Understanding risk and where peer-to-peer lending fits within this is what newcomers need to grasp before they can embrace it. Many have already and many more will do so in the near future.

If you’re interested in becoming a lender, join Assetz Capital as an investor  today.

 

 As with most forms of investment, peer-to-peer lending carries a degree of risk to your capital; in this case if the borrower is unable to repay their loan. At Assetz Capital, we seek to reduce this risk to our investors by taking asset security on every loan.

- November 13, 2015

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