P2P “resilient” despite recession
Peer-to-peer lending is “a resilient member of the modern establishment”, despite the ongoing challenges of the economic recession, Invest and Fund has stated.
The property lender noted that while commercial banking doesn’t always fare well during a recession, P2P lenders are “resilient businesses that not only provide solution-based funding”.
However, Invest and Fund added that the success of P2P investments can vary significantly from platform to platform.
Read more: Assetz co-founder to launch new SME lending platform
“It is a financial mechanism rather than an asset class,” Invest and Fund wrote in a blog post.
“And the mechanism’s success depends on each platform’s management – not the overall market’s sentiment towards the underlying asset.”
For instance, the platform said, house prices could fall and platforms can do very well; or house prices can rise sharply, and platforms can fail. This means that would-be P2P investors should pay close attention to a lender’s management and credit checking processes before investing any money.
However, Invest and Fund pointed out that the most robust platforms have “boomed” in the wake of the financial crisis, and are poised to thrive during the ongoing economic recession.
Read more: In pictures: The Peer2Peer Finance Awards 2022
“Moving forward to 2023, the appetite for challenging the established norm is more significant than ever before, mirroring those post-2008 years,” the platform said.
“We believe that consumer desire will continue to fuel the success of the P2P industry, a sector that’s earned its place as a resilient member of the modern establishment.”
Read more: Invest and Fund predicts P2P will outperform REITs in 2023