P2P platforms are reaching key milestones earlier
European peer-to-peer lending platforms are reaching key milestones earlier than their predecessors, with the average platform taking just three years to hit key metrics.
According to new research from Robocash, platforms used to reach these same metrics within five years.
Robocash analysts took three parameters as the main market indicators: the amount of reinvested funds, the interest paid to investors, and the size of the investor base.
“These parameters, in a sense, indicate the surging popularity of the platform, as well as growing investor loyalty to it,” explained the analysts .
Read more: Auxmoney buys stake in Lender & Spender
The research found that reinvested funds grew by a monthly average of 2.6 per cent between 2017 and 2023. Platforms which were established before 2018 reported €7m (£6m) in reinvested funds on average within the first five years of operations. By contrast, “new generation” platforms take an average of two years and eight months to reach this same milestone.
Meanwhile, pre-2018 P2P platforms were found to have paid out €500,000 in interest to investors within an average of two years and eight months, whereas newer platforms can attain the same value in one year.
Read more: Twino’s first real estate securities project already halfway funded
Regarding the size of the investor base, Robocash noted that the average time to achieve the key milestone of 10,000 customers on the platform has not changed over time, with both young and old platforms taking approximately three years to reach this target.
“This is probably because not that long ago, the P2P lending market was not as competitive as it is today,” said the Robocash analysts.
“Therefore, the attracted customers were distributed among the platforms that already existed at that time.
“Now market concentration is high, so newly attracted investors prefer proven and reliable players, which slows down the rate of customer onboarding by ‘new’ platforms”.
Read more: P2P could replace bonds in investors’ portfolios