A strong final four months to 2016 helped the P2P lending sector grow by 38% on a year by year basis. The industry was able to shrug off the uncertainties caused by economic and industry turmoil in the earlier parts of the year to continue to prove industry sceptics wrong. The total lent by the 9 platforms that form the OFF3R Index was £2.6bn, up by approximately £700m from 2015.
The drop in interest rates in August 2016 seems to have acted to spur the P2P lending sector on as investors looked for alternatives to traditional savings accounts. Furthermore, the gradual rollout of the Innovative Finance ISA since its introduction in April has also contributed to the increase in the total amount lent. There are now 10 platforms cleared to issue the product that offers investors the ability to wrap P2P lending investments in to a tax free ISA.
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