Funding Circle cuts growth targets

LONDON based peer-to-peer lender Funding Circle has warned on revenues citing turbulent market conditions which caused for a decline in demand for loans from its platform.

Indian origin Samir Desai co-founded firm said that it now expects revenue growth of 20 per cent in the current year.

Earlier, it projected for a 40 per cent rise in its revenue.

Shares of the FTSE 250 business, which matches small businesses seeking loans with investors fell 13.5 per cent in early trading on Tuesday (2) to 141p.

The stock had already been the fourth-worst performer in the FTSE 350 in the first half of 2019. It listed at 440p a share last year.

Samir Desai, co-founder and chief executive of Funding Circle said: "The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending criteria.”

“As a result, revenue growth will be impacted.”

He further added that by revising its guidance downwards the company was taking the wise course of action for the long-term growth and development of the business.

“We remain confident in our aim to become the world's largest small business loans provider, helping millions of businesses to create jobs and support economic growth," he added.

The disappointing news from the Funding Circle one of the UK's major peer-to-peer lenders comes as the sector attracts scrutiny from regulators and investors.

The firm handed out £1.2 billion in new loans during January to June period, a rise of 14 per cent when compared to the first half of 2018.

The platform now has over £3.5bn worth loans under management, a steep rise of almost two-fifths from the same period last year.