According to the Peer-to-Peer Finance Association – the industry’s trade association – cumulative peer-to-peer (P2P) lending (at Q2, 2014) had risen to more than £3.1bn, with over 116,000 lenders and more than 188,000 borrowers.
During the financial crisis, high street banks were forced to withdraw from the large loan market, allowing P2P lenders to project themselves as an accessible alternative for borrowers. P2P lenders often offer better rates and improved access to credit, but they face less regulatory oversight and loans come with multiple additional risks.
In order to see off this competition, niche lenders need to analyse current cost margins and lending procedures in order to offer better loan terms and establish a more competitive overall position. Mechanisms like title insurance can be used as an alternative to costly title diligence, reducing loan processing times and protecting against undiscoverable defects such as fraud.
September 23, 2015
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