Investments  

P2P lending platform enters administration

P2P lending platform enters administration

Another peer-to-peer lending platform has collapsed amid the “tougher trading conditions” of 2020 and in the face of legal action.

A statement from the Financial Conduct Authority said MoneyThing Capital, a P2P firm which facilitated crowdfunded loans, has entered administration and appointed Moorfields Advisory to wind down the firm.

According to MoneyThing, the decision was made to “protect the interests of the company’s creditors as a whole”.

It said: “We have taken into account the tougher trading conditions experienced in 2020 as well as litigation by a MoneyThing borrower.

“[The administrators] will continue the orderly wind-down of the remaining MoneyThing peer to peer loan book, return monies to lenders and conclude the firm’s business activities.”

MoneyThing said the appointment of administrators was not expected to have a “material impact” on lenders or borrowers.

The P2P platform’s activities have been in wind down since December 5, 2019.

According to the FCA, investors will receive an update from the administrators in due course with extra information and will continue to be credited capital and interest as per the terms they have signed up to.

The City watchdog also warned that claims management companies may “approach” customers of the platform, warning investors to “be cautious” of using third parties in this instance.

MoneyThing’s customers are not covered by the Financial Services Compensation Scheme.

Troubled market

The P2P market has seen a number of high profile failures over the past few years, with the collapse of Lendy and Funding Secure in 2019.

Both platforms facilitated crowdfunded loans which were used to fund the purchase and development of property, with Funding Secure also arranging pawn-broking style loans secured on valuable items. 

In the wake of its collapse, questions were raised as to how retail clients could be better protected, with many calling for an outright ban of non-advised P2P investments.

The City-watchdog has made some moves in the area, introducing rules last December which prevented people from investing more than 10 per cent of their assets in P2P investments without financial advice.

This has been welcomed by the industry but some have urged the regulator to expand this restriction to the entirety of non-advised sales.

imogen.tew@ft.com

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