The Analysis News & Opinions
Opinion
Breathing-space plans open to question
We welcome the government’s plans for a ‘breathing space’ for indebted individuals, during which they will have an opportunity to seek advice about their finances from a qualified and professional source. The change in the length of the proposed
breathing space – from six weeks to 60 days – is, however, one we view with some concern. There has long been a debate about the most appropriate length of time for the respite period to run, but it is important to keep in mind that a breathing space period is not a debt solution. There are already a number of effective
solutions available to an indebted individual; the breathing space is there to give people time to consider their situation and decide on the particular solution which works best for them. In other words, it should be a means to an end and the duration of the breathing space should be tailored accordingly. We believe that an extension to the
breathing-space period should be available to particularly vulnerable individuals, if deemed absolutely necessary by the regulated adviser overseeing the breathing space. However, it is important to note that
only one breathing-space period should be available to an individual within a 12 month period, to ensure the scheme is not abused as a means to avoid paying debt. The individual should not currently be
part of a formal insolvency procedure, and have not been part of such a procedure in the preceding 12 months.
Stuart Frith President, R3
Development of P2P corporate lending
The UK alternative-finance market grew 35% to £6.2bn in 2017, as P2P business lending became an increasingly key part of financing, according to a report by Cambridge Centre for Alternative Finance (CCAF). Peer-to-peer (P2P) business lending
retained the top spot as the largest market segment in online alternative finance, with £2bn in transaction volume in 2017 and 65% year-on-year growth. Assuming that the vast majority of P2P business borrowers are small businesses with turnover of less than £2m, P2P business lending was estimated to be equivalent of 29.2% of all new bank loans to small businesses in 2017 – nearly double the 15.3% figure in 2016. The next largest UK alternative-finance
categories in 2017 were P2P consumer lending at £1.4bn, followed by P2P
property lending at £1.2bn, and invoice trading at £787m. The year 2017 saw further increases in the
institutionalisation of funding in alternative finance models: on the debt side, 40%, up from 28% in 2016, of funding for P2P business lending was provided by institutional lenders including mutual funds, pension funds, asset managers, banks, family offices, and other financial institutions. This trend was also seen in equity-based crowdfunding, where 49% of the funding was provided by venture capital funds and professional investors ‘co-investing’ with retail investors. Bryan Zhang, executive director of CCAF,
said: “This report reflects an industry playing a growing role to help consumers and firms access finance, becoming more diversified, sophisticated and institutionalised.”
Exporting set to be up for discussion
At a time of intense interest in exporting and dealing with new, emerging markets, senior industry professionals are to be invited to a debate run by CCRMagazine in association with Cedar Rose. As the politics remains somewhat opaque
on the future of the Brexit deal, the industry is looking to new horizons and where it can find the key information to trade safely, such issues will be up for discussion. Stephen Kiely, editor of CCRMagazine,
said: “In an ever changing world, it is crucial to be able to share experiences of trading in different regions and to consider whether you have all the right information and best
partners to allow you to do so successfully. So I am very pleased to be working with Cedar Rose to provide what should be a valuable and informed debate. “I look forward to hearing the different
knowledge and insight that will be shared between the participants.”
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www.CCRMagazine.com
December 2018
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