Peer to peer founder to assist UK SMEs
(21 March 2017 – Europe) Founder of UK peer to peer lending network, Zopa, has been appointed chairman of MarketInvoice, a website that focuses on serving small businesses in need of cash.
In his new role, Giles Andrews is aiming to help scale up the business while attempting to preserve its nimble “fintech” culture.
MarketInvoice promises companies a quicker, more transparent and often cheaper source of working capital than from banks, by letting companies sell their invoices in return for cash. The site has grown rapidly, extending more than £1.1bn of finance to small businesses since it was founded in 2011 — almost half of which came in the past year.
Its founder Anil Stocker, an ex-Lehman Brothers employee, aims to reach £2 billion of total lending this year, helped by the launch of a new service to offer finance secured against all of a company’s invoices, rather than on a per-invoice basis.
Stocker is also in talks to provide banks with access to its platform as a “grey-label service” — allowing them to offer it as a co-branded product to their small business clients.
The collaboration is part of a burgeoning trend whereby P2P sites and banks are teaming up.
For P2P, such partnerships give access to an established customer base, a reputable high-street brand and ultimately scale by boosting lending. For banks, joining forces is a way of accessing more nimble technology while helping to serve customers.
Zopa, which was at the vanguard of P2P collaboration with banks, teamed up with Metro in 2015 so that the lender could channel some of its excess customer deposits through the P2P site as loans.
Some reports suggest such partnerships are necessary for P2P to achieve sufficient size to gain traction.
Total P2P lending in the UK reached £7.3 billion at the end of last year, according to figures from the Peer-to-Peer Finance Association.
But Andrews has higher hopes. He says Zopa is “growing at a rate where we start becoming significant even compared to banks fairly soon, in that particular lending activity.” He believes the UK P2P market will reach 10 per cent of total unsecured lending in about five years.
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