Exciting times lie ahead for the peer-to-peer (P2P) business lending sub-sector of crowdfunding, as we've indicated consistently in recent news reports. A major step up lies ahead when the FGCA, the chief regulator, drives through permissions permitting P2P platforms like Money&Co.'s to provide Innovative Finance Individual Savings Accounts (IFISAs).
On a more general level, the University of Chicago and the University of Cambridge are once again partnering to explore the alternative finance industry and offer guidance on its trajectory for the coming year, report our friends at pymnts.com. "The University of Chicago's Polsky Center for Entrepreneurship and Innovation and its Booth School of Business are working with the University of Cambridge's Cambridge Centre for Alternative Finance at its Judge Business School to collaborate on their second report of the alternative finance landscape, but already, industry experts at these institutions have some idea of how the sector will continue to evolve this year...
"According to Robert Wardrop, executive director of the Cambridge Centre for Alternative Finance, the upcoming report on the issue will look [at whether there has been a sustainable boom] - though the financial value of alternative lending may not be the right question to answer this year.
"'The past year has seen significant changes in regulatory policy, as well as several market and firm-specific events relevant to the online alternative finance industry,' he said in a statement. 'Our hope is that this year's report will shed light on how these developments are impacting the evolution of the industry across the Americas.'
"His remarks reflect the fact that success of the alternative lending space cannot be measured solely by transaction volume and value. In an interview with Crowdfund Insider, Tania Ziegler, research program manager at CCAF, said the upcoming report 'will probe how the industry is responding to shifts in regulation and how platform operators view and address systemic risks associated with a growing market.'
"The debate continues to rage over the future of alternative lending. Proponents of the industry say the space continues to fill the gaps for SME and individual borrowers that are rejected for a loan, but critics argue that a lack of regulation and high fees mean the days for alternative lending are numbered.
"But it may be difficult, if not impossible, to accurately predict an industry that is shaped by the varying regulations and market conditions across borders.
"'Our global benchmarking research has highlighted how each region is a uniquely 'area-specific' way of doing things, and this has translated into influencing how platforms operate and how models evolve,' Ziegler told the outlet. 'Right now, we are seeing a certain amount of model consolidation, reflective of the pre-existing financial structures in their home market.'"
Latest Offering & Lending Risk
Meanwhile, the latest loan offering on site, an A-rated five-year loan from legal publishers, Lawpack, is making further progress. It is 57 per cent funded at the time of writing.
But be warned: Some of the lenders' bids may prove a little ambitious. Offers of expensive credit are often driven out at the end of the auction period by cheaper offers.