What happened last month in peer-to-peer lending and real estate crowdfunding? Which platforms are on the rise and which ones are falling behind? How has the sector performed over the last 12 months? We take a look at numbers reported to P2P Market Data in August 2021 and dive deeper into this month’s special focus: the seasonal increase in student lending.
About the monthly report
In the Monthly Funding Report, we publish the funding amounts of real estate crowdfunding, peer-to-peer & online marketplace lending platforms. We currently track data from 68 participating platforms, including originators operating in 24 markets and with 9 different currencies. Please note that:
- The statistics exclude some prominent platforms such as Lending Club, Funding Circle, Credimi and Prosper, which do not accept individual investors and remain open only for institutional and corporate investors.
- None of the numbers cited is an estimation – the amounts are reported directly to us or pulled from the platforms’ publicly available loan books and statistic pages. (A special update: Because of a technical bug in Bondora’s public loan book, we made an exception this month and did estimate their monthly funding amount based on volumes available for only 8 days in August 2021.)
- We convert all amounts to EUR for comparison reasons, using exchange rates from the last day of the month.
- Historical funding volumes reported below may divert slightly from volumes calculated in previous reports due to exchange rate fluctuations and the changes in the pool of platforms we track.
This month, we’ve delisted CapitalRise due to their failure to comply with our requirements concerning timely and reliable data reporting. You can also now browse our updated dataset on version 2.0 of the P2PMarketData’s website. It offers more functionalities, detailed and reliable information about P2P lending sites, and deeper integration with the platforms through API. Check it out!
Key highlights: What happened in P2P finance last month?
We recorded a total funding volume of €457.6m in August 2021. A slight decrease was recorded in the EUR and CHF-denominated funding compared to July while funding in British pounds boomed (an increase of 68%).
Looking at investment types, business lending continued a modest decline after some fantastic gains in Q2, which we analyzed in-depth in the June report. Real estate, marketplace, and personal lending remained fairly stable. A significant increase was noted in ‘other funding types’, fuelled by an almost fourfold increase in funding of a British student lending platform – Lendwise. Another student lending site in our database – the Swiss Splendit, also funded almost twice as much loan volume as in July (read more about this in the deep dive section below).
We reported several noteworthy milestones reached last month:
- Credit.fr – a French business lending site has funded over €100m worth of loans;
- An Estonia-based marketplace – IUVO Group has crossed the €200m total funding barrier;
- The European real estate market leader – EstateGuru has broken above the €400m mark;
- The quickly-growing challenger to Mintos – Peerberry, has funded over €700m worth of loans since its inception; and
- The European market leader itself – Mintos, has reached over €7b of total funded loans to date. Congrats!
The monthly funding volume in August increased marginally (+0.8%), reinforcing the long-term upward trend. The overall growth over the last 12 months has been remarkable and stood at +92% since September last year, or a 7% monthly growth rate on average.
Big player ranking
The two largest marketplace lending platforms – Mintos and Peerberry continue not only to dominate the European P2P lending scene but also outpace most other big sites in terms of month-to-month growth. Together, they account for almost half (46%) of the total funding volume among the platforms we track.
Rising star ranking
Here, you can see 10 platforms that have noted the fastest and the slowest growth in the last 12 months. Italian platforms continue to dominate the rising star ranking with 4 platforms in the top 10 (Criptalia, Borsa del Credito, Trusters, and Soisy) – we wrote about the exponential growth of the Italian P2P lending sector in the July report. The group of slow-growers has noted very little variation over the last months, with sites across countries, currencies and investment types.
The deep dive: A spike in student lending
The amount of student lending recorded in our database grew by an astounding 358% in July and another 233% in August. Looking deeper into our data, two main conclusions come to mind.
First, student lending is prone to significant seasonal variations, increasing notably between July and October – corresponding to the start of the academic year, and staying relatively low and stable throughout the rest of the year (although an ‘extra’, irregular spike in our data shows up in December 2020 – see the chart below).
Second, over the long term, student lending has grown at a much higher rate than the sector at large – the average monthly growth rate stood at 51% over the last 12 months (compared to 7% for the whole sector), and at 42% in the past 2 years (vs sector's 2%).
There is a crucial setback to our data though – we only track two student lending platforms and the large majority of the recorded volume comes from just the single one – UK’s Lendwise. So, the volume growth doesn’t necessarily mean a boom in P2P student debt in general – it might be just a good performance of this particular provider.
I searched other sources to verify this trend but no robust data seems to be available. All major industry reports, including Cambridge Centre for Alternative Finance Second Global Alternative Finance Market Benchmarking Report and AltFi’s Alternative Lending: State of the market report either do not mention or deliberately exclude student P2P loans from their analyses. One of the reasons might be that student lending isn’t so prominent – Lendwise has loaned a total of just above £17.5 million to British students – a minuscule amount compared to over £160 billion of outstanding student loans in the UK. The high availability of government-subsidized student loans might simply be enough to satisfy the demand (unlike, for example, ineffective traditional SME financing, pushing businesses towards alternative solutions).
In this context, it would be even more alluring to explore who Lendwise’s student borrowers are and why they have picked up P2P loans en masse this year.