Consumer Lending Q&A

Consumer Lending: Q&A
Panelists: Giles Andrews, Co-Founder & Executive Chairman, Zopa; Nicholas Harding, CEO, Lending Works; Rhydian Lewis, Founder & CEO, RateSetter
Moderator: Christine Farnish, Chair, P2PFA

The discussion kicked off with the question of whether companies worry about the relatively low level awareness of P2P lending among the general population. Mr. Andrews said the awareness level is likely understated and if a survey were conducted among people who worry about their finances, the level of awareness would be much higher. Mr. Lewis said he saw this as a big opportunity for the industry to grow. He said that a more interesting statistic would be a measure of how many people have considered investing and chose not to. Mr. Harding said consumer awareness would increase naturally.

The discussion then shifted towards finding credit-worthy borrowers and whether the quality of the loans will decrease when the “wall of ISA money” hits the market. Mr. Lewis said he thought rates of return to investors would decline, but credit quality would not. Mr. Harding agreed with him and mentioned that online lenders have a lot of skin in the game because they publish all statistics on their websites. With regard to the risk to retail investors, the three panelists agreed that buffer funds and diversification would help avoid losses.