Belfast-headquartered data and research provider Orca has launched a new platform aimed at helping financial advisers and qualified investors to invest in within the peer-to-peer (P2P) lending market.
The platform will enable investors to compare P2P investments through standardised metrics hence to conduct in-depth due diligence.
Among features retained for the platform remain interest rates, default rates, bad debt rates, financial standing.
Orca has translated millions of loans, covering 90% of the UK P2P professional market.
Further measures will be added to the platform following its launch. This will include a proprietary Orca Scoring aimed to enable users to identify the risks and opportunities that best match their needs.
The Orca platform will be free to advisers, investors and industry commentators until September 2017.
Speaking to InvestmentEurope, Orca’s CEO and co-founder Iain Niblock says that Jordan Stodart – co-founder and chief market officer of Orca – and him (pictured) set up an alternative finance business that was raising and lending money three years ago, similar to that of a peer-to-peer lending platform but by way of a retail bond instead.
“The market was relatively mature in the P2P lending space at that time, but independent data aggregation as well as support services for retail investors and IFAs were missing. It was not the right time to launch an independent data aggregation research service. The market is now ready for it,” Niblock argues.
Niblock and Stodart explain the P2P lending market has seen continuous rise in investments. It is estimated that by 2020 around 2.7 million people will be investing in P2P.
Orca’s CEO Niblock says P2P investing has risen at a fast pace across Europe but as for now, the company focuses on the UK market because of its size.
He adds that in the UK, some £3.1bn have been invested through P2P lending platforms over 2016.
“Although, we track the European market it is not of a scale that warrants our services, yet,” he adds.
According to Niblock, the average yield in the P2P lending space is between 5% and 6% per annum at the moment.
He emphasises that yields are predictable as well as not correlated to stock market fluctuations. And this raises investors’ appetite.
“We stress a couple of major trends in the P2P lending market, currently. The investor base has become even more diversified. Retail investors were first to invest in the asset class and now large institutional clients have started to enter the segment, mainly through a couple of major P2P platforms.
“The British Business bank also invests in P2P lending through Funding Circle and RateSetter, while the asset class raises appetite for IFAs who, as of April 2016, have been given permission to recommend peer-to-peer,” says Niblock.
Stodart assesses the Innovative Finance ISA that entered into force in April 2016 has had a significant effect on the P2P lending market as P2P lending agreements are eligible for a tax-free ISA for the first time.