P2P platforms are starting to achieve profitability
A significant number of peer-to-peer lending platforms in the UK are now making profits, despite the uncertainty caused by the Covid-19 pandemic.
Over the past few months, more than a dozen UK-based P2P lenders have either reached profitability for the first time or increased their profits from the previous year.
Funding Circle UK first turned profitable in the second half of 2020, achieving an operating profit of £ 21.3million.
Earlier this year, Folk2Folk said it made a profit of £ 1.1million in its latest annual results, up 460% from £ 198,043 the year before. And Relendex made a profit of £ 135,760 in the 12 months leading up to January 31, 2021, reducing its losses since inception to £ 5,773,702.
Shojin Property Partners reported £ 234,000 profit on almost £ 1million turnover as of June 30, 2020, after suffering a loss of £ 830,000 in the previous year and a loss of £ 2.64 million in 2018.
EasyMoney also turned its balance sheet around, realizing an operating profit of £ 57,184 last year, after recording a loss of more than £ 1.023m the previous year.
It is believed that increasing loan volumes, standardization of alternative lending options and government support programs are behind the P2P profitability trend, as well as the long experience of some platforms. and the success of their business models.
“You could argue that this is a bull market for P2P / market lending due to the high level of investor appetite,” said Roy Warren, Managing Director of Folk2Folk. “These funds are the critical ingredient in fueling the SME lending engine where demand for business loans remains strong as business owners look to invest in their businesses to adapt, diversify, or ‘head for it’. ‘future’ by building resilience. “