With peer-to-peer lender platforms poised for massive growth in 2016, let’s take a look to probe the underlying trends that are likely to influence the surging industry in the months ahead.

p2p lending to small businesses will grow

Given that lending to small businesses was the original raison d'être for the creation of peer-to-peer lender platforms, it’s no surprise that there was a rise in the use of p2p platforms amongst SMEs during 2015. It’s a trend that looks likely to gather momentum significantly in 2016. After the recession, SMEs seeking financing for repair work or for relatively small amounts of credit suddenly found that the chastened banks were no longer willing to lend. While the situation has eased since the dark days of the recession, many small businesses find that seeking thousands of euros through a bank is still a non-starter. Across Europe, peer-to-peer lender platforms are offering solutions that are seen as increasingly attractive by many companies.

p2p lending will continue its global spread

From little acorns, mighty oaks will grow. The peer-to-peer lending market has become increasingly global. Led primarily by the United Kingdom and the United States, this sector of the alternative finance market has undergone a major shift, with China becoming the largest p2p lending market in the world. According to Standard Chartered, China now has over 1500 platforms. The spread isn’t confined to the land of the oriental dragon - many new markets are developing peer-to-peer lending platforms, and it seems certain that there will be a concomitant growth in cross-country investment opportunities.

Institutional investment will grow

In Europe, the first institutional investments have come to peer-to-peer lender platforms over the last year or so. This is a trend that we think is set to strengthen considerably; fund managers are on the lookout for higher yields in a context where rates on money markets remain at historic lows. In Europe, smaller institutions and high net worth individuals are already investing on p2p platforms, and more are likely to join in during 2016.

Banks will embrace peer-to-peer lending platforms

It’s no secret that the major banks across the world have been rattled by the surging rise of peer-to-peer lending, and they’ve been working on how to respond to the challenge. While some (like Nordea and HSBC) have started to contemplate cultivating their own FinTech start-ups via their own incubators and accelerators, others are either launching their own p2p offerings or purchasing stakes in newcomers. The canniest players in the banking sector are doing their best to be well-positioned in these changing times, while a few are simply ignoring the lending revolution that is occurring under their noses.

Regulatory work

The role of regulators will continue to be important during 2016, a strong sign that the new financial service offered by peer-to-peer lenders has been recognised as legitimate and crucial. Regulators have had a huge impact on the p2p lending business. There’s no doubt that this will continue throughout the next 12 months in key markets such as the UK and the US, as officials work on new rules based on the “golden standard” set by the UK’s FCA. Estonia, for example, is developing new lending regulations that will cover p2p platforms