According to Christine Farnish of the P2PFA (peer-to-peer finance association) industry defaults were around 2% end January 2016. Here is a table of some of the UK lending platforms we list that have published their current loan volume, provision fund size:
|P2P lender||Provision fund||Expected default rate (2016) % of on-loan volume||Current loan volume|
|Wellesley & Co||£2,834,444||1.0%||£232,052,648|
(Example UK P2P lenders provision funds and pay-out statistics: 16/02/16)
The above table gives a representation of how some of the major UK peer-to-peer lenders operate their provision funds. Usually the fund will pay-out upto a percentage of the loanbook (calendar year loan volume). Here’s Wellesley & Co as an example:
If a borrower defaults at the time of the statistics being published you would be covered, assuming you qualify for coverage and the directors decide to payout. The fund size will need to grow at the same rate as the loanbook (ratio) to ensure coverage for investors.