Funding Circle UK chief executive Lisa Jacobs has claimed regulation played a part in the decision to leave the peer-to-peer lending sector.
Last month, Funding Circle permanently closed down its retail P2P lending platform, two years since pausing retail activity while focusing on government lending schemes during the pandemic and almost 12 years since its launch.
Jacobs said it was “sad” the platform had moved away from its P2P roots but put the decision down to a combination of reasons including regulation and the evolution of the industry.
She said she couldn’t say “one way or the other” whether Funding Circle would have exited from retail P2P lending if the FCA were kinder to the sector and emphasised the platform has always supported regulation that protects customers.
“This is where we started as a business,” Jacobs (pictured) said.
“Over that period, we’ve had a great product that’s delivered a four per cent return to investors. It wasn’t one single reason.
“We paused retail two years ago when we started to lend through the government loan schemes because retail couldn’t participate, and we wanted to focus on the government schemes and those schemes ended up lasting a lot longer than anyone expected at that stage.
“Now it’s been two years in which we’ve not been open to retail investment. Over that period about 80 per cent of the portfolio have paid down, there’s been regular borrower repayments and it’s now just a small portion of our loans under management, less than five per cent.
“That combined with the fact the industry changed and the regulation has changed. With all those things coming together, we thought it was a natural moment to retire the product, and we’ll continue to service the book for our investors.”