Among 1,100 British consumers polled by consultancy firm EY, only 7 percent indicated they had used such a service to borrow money this year. A separate poll of 1,050 Brits by Blumberg Capital revealed just 4 percent of them had utilized alternative lending platforms over the previous year, according to the Financial Times.
Investors have been drawn to peer-to-peer lending programs due to their potential offering of increased returns when interest rates are low, but venture capital funding has begun to dip for these alternative lenders. Where FinTech firms worldwide attracted $20 billion in investments over the first half of 2016, that number dropped to just $12 billion during the first six months of 2017.
The lower funding amounts could be attributed to banks having joined the peer-to-peer lending landscape, creating their own technologies or joining forces with startups to stay current, thus broadening the competitive field.
Some potential borrowers in the U.K. are hesitant to use peer-to-peer loan services due to worries about identity theft and scams, with 43 percent of Brits surveyed by Blumberg indicating fraud as a major concern. In particular, members of the older generation of British adults have forged strong bonds of trust with their banks and don’t necessarily want to change their habits, suggested David Blumberg, founder of Blumberg Capital, in remarks to the Financial Times.
Alternative lenders like peer-to-peer platforms are more likely to see success in other international markets beyond the U.K., the EY survey predicted. Nearly half of Chinese consumers polled by EY reported a history of using internet-based or peer-to-peer lending services, while 20 percent of adults in India had used them, the EY survey reported.