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Peer-to-peer lender Fundingsecure enters administration

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Another key trend in the research was the spike in managers looking to move towards an alternative third-party service provider over the next year, now sitting at 29 per cent.
Another key trend in the research was the spike in managers looking to move towards an alternative third-party service provider over the next year, now sitting at 29 per cent.

Peer-to-peer investment and lending platform Fundingsecure has gone into administration, the financial regulator announced.

Fundingsecure operated a peer-to-peer lending platform that facilitated crowdfunded loans and pawn-broking style loans secured against valuable items.

In a statement on the company’s website, Fundingsecure said its board of directors had resolved to place the firm into administration today.

CG & Co administrators have been appointed to oversee the administration.

The Financial Conduct Authority said the activities of peer-to-peer firms are not covered by the Financial Services Compensation Scheme, which protects customers when some financial services firms fail.

It had emerged in May that the platform was suffering from mounting defaults. The Telegraph reported that £24m of loans in Fundingsecure’s £88m loan book were considered in default or expected to default.

A further £33m was found to be in forebearance – meaning the platform had extended the loan time because the borrower was unable to repay it.

Fundingsecure admitted at the time that the level of late payments was “unacceptable”.