Why Kuflink believes the UK P2P market is “very strong”
Kuflink will not be expanding into Europe in the near future, as chief executive Narinder Khattoare hails the UK’s peer-to-peer lending market as “very good and very strong”.
New EU legislation will soon come into force for crowdfunding and P2P platforms on the continent, and industry stakeholders have warned that these new laws could make it harder for UK platforms to expand across Europe. But Khattoare (pictured) does not believe that UK platforms are missing out.
“The whole lending spectrum is different to here in the UK,” says Khattoare.
“There are some great opportunities in the EU but you have to have the right people. I have already seen the mix of the people who run these businesses – some are very experienced and others have little to no experience whatsoever.”
He points out that the UK has already been through this regulatory bedding-in period, as the home of the first-ever P2P lending platform way back in 2005. Since then, regulation of the UK’s P2P and crowdfunding sector has intensified, resulting in a number of exits as well as new opportunities for growth.
“I believe we are ahead of the game here, hence why we are performing so well,” Khattoare adds.
“There are some great people running platforms here in the UK and they have the right people within their businesses too. We have a great trade press here too who get the message out which always makes life easier for businesses like us.
“I can’t comment on other businesses expanding into Europe, but we have no plans as we continue to bring new products here and further enhance our offering.”
Khattoare believes that UK platforms should focus on mastering their own product offerings at home before considering expanding into new territories.
“Get a better understanding of your own market and have some traction there before moving into other countries,” he says. And this advice applies to European platforms mulling a UK entry as well.
“They need to go through a whole circle of lending, recovering and potentially losing some money for them to go into other territories,” says Khattoare.
“I always think you need to have a plan in advance if you have aspirations to go abroad and what the key objectives are and what can you bring to the table that others aren’t offering in the current country. If there is already a similar provider then what separates you apart from them?”
Khattoare is not convinced that there is space in the UK market for new entrants from Europe, saying that it will depend on their product offering. But ultimately, he is evangelical about the strength and potential of the UK P2P market, which he credits as being “down to the calibre of people who run the businesses”.
“There is a lot of experience here and people who are looking to build some serious businesses that give back to borrowers and investors,” he says.
“We’ve seen others collapse due to ridiculous lending rates and in some cases fraud – the ones that remain have reputable businesses that have longevity in them. The key is the talent and tech which some businesses are producing which make the UK P2P sector very good and very strong.”