The Downfall of Funding Circle

The peer-to-peer sector was established as a response to the financial crisis of 2008 and the free-fall of Funding Circle's stock prices are an ominous sign to those who need a viable alternative to bank lending. With the health of the market in apparent decline, the collapse of Funding Circle could result in a shrinking of the market resulting in investors being deterred from committing further investments in peer-to-peer schemes.


A familiar story: British banks are failing the consumers once again.


The following statistics were taken from FairMoney research that surveyed 2000 UK adults on their financial situation;

  • Over 10 million Brits feel that they're in their worst financial situation
  • 35 percent of the British population feel that the banks bend the rules regarding short term loans
  • A quarter of 18-34 year olds have relied upon loans whilst 18 percent of 18-34 year olds who have taken out a loan have been previously rejected multiple times

Dr Roger Gewolb, the Executive Chairman of FairMoney, provides commentary on how the decline of Funding Circle and peer to peer lending will negatively influence the British consumer market. 

"We saw that following the financial crash of 2008, the banking sector became incredibly reluctant to feed sufficient funds into the loaning sector. Over a decade on, we still have not seen much notable improvement. The recent collapse of Lendy was an omen for things to come within the peer to peer market and it would seem that Funding Circle is heading for big trouble.

With the continuation of no notable alternatives to the UK bank lending sector, British consumers simply have nowhere left to turn. It is with no doubt that the only people who suffer from this turn of events are the British borrowers. With seven percent of Britons being rejected by banks for loans four or more times, it is not inconceivable that we are witnessing a struggling lending market that mirrors the state of the market post 2008."