Lending platform Funding Circle has announced plans to shutter its peer-to-peer lending platform, which had paused its activities due to the Covid-19 pandemic.

Funding Circle said that the decision also includes halting buying and selling loans through the secondary market.

It will continue to manage the customer’s loan portfolio on an ongoing basis till the loan has been repaid or recovered. Customers will continue to receive repayments of interest and principal into their account, it added. 

Retail lending, which has been closed since March 2020, accounts for nearly 5% of Funding Circle’s total loans under management.

The pandemic forced the firm to focus on offering finance to small businesses via new and existing products including government schemes, which retail investors could not participate in.

Changes within the industry, which includes key players shuttering their retail units, proposed regulatory changes and market dynamics were also among the reasons cited by Funding Circle. 

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Since its inception in 2010, 90,000 retail investors earned average annualised returns of 5% from loans in the retail platform, it added. 

“This has been a difficult decision to make, and we have considered a number of options, but we feel now is the right time to close retail lending,” the firm’s statement read. 

The announcement was made alongside the firm’s full-year 2021 results, Funding Circle has reported a pre-tax profit of £64.1m.