It was recently reported (Venture capital firm predicts peer-to-peer lending to top $1tn by 2025) that peer-to-peer lending is going to top $USD1tn per annum globally by 2025. While the prediction does come from a U.S. venture capital firm, likely an investor into a P2P business and thus promoting the concept for their own benefit, the article does contain some detail worth considering.
The first is the almost phenomenal growth in P2P lending in the UK from 2012 £381 million to 2013 £843 million. Certainly a strong indicator of growing acceptance at least in that market, but understandably seen as a trend likely to be replicated in similar cultures.
The article does cite UK research “that 84% of consumers would not invest their money through the channel” for reasons of regulation, but it seems the concerns were also those normal to any new product hesitation.
My question is what are the likely impacts for SME funding in Australia? So I had a look on our local P2P sites and there was little activity with regards to SMEs. I also had a look at our local crowdfunding sites for alternate sources of SME funding and there is definitely little, if any, penetration in that space at this time. However, I am not disheartened by the present situation and think it quite understandable. One key aspect affecting SME funding supply is government policy and our current policies, indeed those of the last ten years regardless of which government is in power, are less than lubricant to SME funding supply.
In my opinion P2P lending probably will be worth $USD1tn per annum by 2025 but consumer lending will account for the majority. SME funding is a lot different from consumer lending and while I definitely see trends for alternative sources of Supply it is only partly from P2P or crowdfunding options.