Lending Works exits P2P lending market

Peer-to-peer lending platform from the United Kingdom Lending Works, has announced that it will exit the retail funding market. According to the firm, there is a declining demand from investors. Lending Works is closing its retail investor product and will move into a ‘run-off’ process.

Lending Works was founded in 2014 and is one of the oldest peer-to-peer lending platforms in the UK. The platform works with partner firms such as insurance companies, banks and online intermediaries to provide customers with credit products quickly.

‘We’ve lent nearly €276 million’

According to the platform, it has financed nearly 276 million euros. In a blog post, the company states that it has seen the dynamics of the P2P market changing, with retail investor participation declining. “This has been exacerbated by the Covid-19 pandemic, to the extent that we no longer feel it is large enough to support a mainstream lender such as Lending Works. We now need to utilize alternative funding sources to ensure that we can provide our loan customers with the service they need”, said Nick Harding, CEO and founder.

‘We now need to utilize alternative funding sources to provide our customers with the service they need.’

Subsequently, Lending Works has will close its retail investor product and move into a run-off process. Retail investors can no longer invest money, but those who have already invested in loans will continue to receive repayments until their balance is fully repaid. According to the platform, apart from no longer being able to invest, the customer experience will remain the same.

Embedded finance

At the end of 2020, Lending Works was acquired by Intrivia and since then, it has been increasing its focus on institutional capital to fund its embedded lending. It now states that it’s well-capitalized to move forward in that market.

‘Demand for embedded finance is growing rapidly.’

“Demand for embedded finance is growing rapidly and it’s expected to accelerate over the next few years as brands recognize the benefit of leveraging our technology and benefitting from exceptional customer experience. Now that we’ve moved to an institutionally-funded business model, we’re well-placed to keep up with this demand. We’ve already achieved so much, but we believe there is still a long way to go.”