|« Landbay close fixed rate product||Folk2Folk pass £100million mark »|
What effect will "Brexit" have on peer-to-peer lending?
The upcoming referendum on the UK's continued membership of the European Union is certainly a contentious issue with viewpoints becoming polarised. A recent poll on the P2P Independent Forum showed a bias towards members favouring an exit rather than remaining, but the comments the discussion provoked on both sides shows how difficult this has become.
So what would a "Brexit" mean to peer-to-peer lending? The simple and honest answer is "we don't know" and those that have a definitive answer - either positive or negative - would be high in guesswork. If the UK were to vote to leave then there would be some uncertainty in the short term, however if the UK voted to remain there would be continued uncertainty in the longer term, especially - as expected - if the vote was close. Uncertainty may mean changing interest rates or churn within the employment sector and that could affect people's finances, positively or negatively.
In terms of peer-to-peer lending there is nothing exclusively EU-based that would affect the sector within the UK. The concept of peer-to-peer lending started within the UK, and the UK continues to be a leader within fintech. Lenders with funds in Euros may face greater currency fluctuations if the UK were to leave, but with underlying problems in some Euro areas, having funds in Euros does carry some longer term risk regardless.
The referendum is likely to be decided by factors other than simple economics, but if the UK does vote to leave we'll be covering any potential impacts that could affect lending.