On my recent trip to London I sat down with the founders of the three leading UK p2p lenders: Peter Behrens of Ratesetter, Samir Desai of Funding Circle and Giles Andrews of Zopa. This extended edition of the Lend Academy Podcast features my conversation with all three leaders.
There is a lot we can learn from our UK cousins in this industry. They have a more vibrant and competitive industry with over 20 p2p lending platforms in operation there. This makes differentiation and achieving scale even more important. These three companies have achieved this scale and are the clear leaders in the industry there.
In this podcast you will learn:
Who is the typical UK borrower and investor for each platform.
Why the mass affluent are looking to p2p lending now more than ever.
The importance of having a safety net for investors.
How this safety net, called a provision fund, functions at Ratesetter.
The flexible options for investors at Ratesetter.
The amazingly low default rates at the UK platforms.
The increased interest in p2p lending from institutional investors.
The importance of the individual investor even with the larger investors coming in.
The opportunities in the UK for US investors.
The differences between the UK and US market for Funding Circle investors.
How and why Funding Circle is tracking the businesses that were declined for a loan.
The experience of Funding Circle in the US market.
The expansion into commercial property loans at Funding Circle UK.
How the UK government is lending money on Zopa.
The concentrated competitive environment for UK p2p lenders.
How Zopa has been able to gain brand awareness in the UK.
The similar credit performance in 3-year and 5-year loans.
Why Zopa decided to focus on prime borrowers from the very beginning.
The tax problem for investors in the UK and why a low default rate is very important.
Why Zopa introduced their Safeguard product that protects investor money.
The three simple questions that all investor need to answer before putting their money to work on Zopa.
Why the Lending Club IPO is important to the industry in the UK.
Since recording these interviews, the UK government has announced that they will allow p2p lending to be included inside ISAs, so this will relieve the tax issues for many investors in these platforms. You can read more about this announcement on Wiseclerk.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.