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Goldman Sachs' P2P competitor Marcus lends $1 billion in first 8 months

June 22, 2017 • By TAB team

Launched last October, Goldman Sachs' online lending platform Marcus has already lent loans worth more than $1 billion, according to GS CEO Lloyd Blankfein.

Launched last October, Goldman Sachs' online lending platform Marcus has already lent loans worth more than $1 billion, according to GS CEO Lloyd Blankfein.

A direct competitor to peer-to-peer lending, does Marcus' arrival herald a new era of competition in P2P? And should P2P companies be worried?

Named after Marcus Goldman— who founded the firm 147 years ago with Samuel Sachs — the platform allows credit-worthy borrowers to apply for fixed-rate, no-fee loans of up between $3,000 and $30,000 for two to six years.

This prolific growth has been thanks in no small part to GS' existing economies of scale, which have allowed them to invest heavily in customer service. Also, faith in the GS brand has led to borrowers leaving less respected lenders to transfer their liabilities to sit on deposit at GS.

The largest P2P lender in the US, Lending Club, originated loans worth over $8.5 billion in 2016. So GS still has a way to go, but Blankfein was typically bullish given their robust start.

"By the end of this year, we'll have crossed two billion dollars," Blankfein said. "We wanted to grow it slow to make sure we were doing a good job. But we're going to grow, you know, we're going to grow this thing."

GS say they will launch Marcus in the UK next year. UK P2P giants, such as ZOPA - who have lent £2.4 billion to UK consumers since 2005 - and RateSetter - who lent £685m in the last year - will be watching closely to see what effect the arrival of the behemoth US bank has on market share.

In 2010, GS began the “10,000 small businesses UK” programme, providing advice and support to start-up British companies. So it's clear that they're focusing hard on the start-up and SME space. Here, especially in the UK, they will run into direct competition with P2P platforms.

Will the giant of traditional finance have the upper hand? Or will the hungrier, younger, fintech players see off this powerful competition? It could be their most challenging competition yet. Watch this space.