Current Affairs

Brexit and Lending Works

On 24th June, Britain awoke to the news that its electorate had voted in favour of leaving the European Union<--break->, triggering a chain of events which included the resignation of our prime minister, the FTSE 100 and FTSE 250 seeing hundreds of billions of pounds in value being wiped off, and a dramatic slump of the sterling to record 30-year lows.

All of the above took place within mere hours of the result being announced, and there will continue to be trepidation and uncertainty within financial and trading markets for the foreseeable future as the complications of where to from here for Britain is determined.

So, where does this leave Lending Works?

Our personal preference would have been for a vote to remain, but we have carefully considered both potential outcomes in recent months and it is our firm belief that our platform is not greatly exposed to many of the potential negative implications of the Brexit vote, and we do not anticipate any significant knock-on effects in the near future.

Our business model is robust, while peer-to-peer lending as a whole is characterised by the steady and predictable returns it has consistently delivered over the last decade. In fact, from the perspective of lenders, we are optimistic that this result will even present an opportunity for our industry, given that markets are expected to be highly volatile while the process of Brexit unfolds, and peer-to-peer lending may thus present an attractive alternative for potential investors looking for a strong yield with less volatility.

We of course acknowledge that there will be external factors which are not yet predictable or controllable, and may yet have an impact on P2P platforms. However, as a nimble, agile and, above all, healthy company, we have no doubt that we will be able to deal with any issues which may arise decisively and positively over the coming months.

A positive future

It is too early to speculate about the precise effects this will have on rates, or anything else relating to financial services as a whole, but our senior management team and board of directors will be keeping a close eye on the situation so that we are well placed to respond accordingly. Moreover, peer-to-peer lending as an industry has already endured the stress test of a recession, and passed with flying colours. So even if the worst were to eventuate, we are confident that our rigorous processes will continue to ensure that savvy lenders and prime borrowers will continue to benefit from a superior deal.

Naturally, we will provide updates as and when they are appropriate. But in the meantime, all our customers can rest assured that it’s business as usual and everything we do will be with customers’ interests at the top of the totem pole – as has been the case since day one.

If you have any further questions relating to the EU referendum result in this context, or any other queries for that matter, please do feel free to get in touch with us.

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Michael Todt

Mike joined Lending Works in early 2015 with a background in marketing and journalism. Having long held a passion for economics, he is now the chief contributor to the Lending Works blog, and regularly writes about all things peer-to-peer lending, fintech and personal finance.