Peer-to-peer (P2P) lenders will struggle to compete and grow if they continue to make it look as if they are concealing something, according to P2P comparison site 4thWay.

Neil Faulkner, Found and Managing Director of 4^th Way, is calling for more P2P firms to release performance data after RateSetter recently announced that it would be publishing more details of its loan book.

Neil told Bridging & Commercial: “A small number of successful P2P lending companies are leading the way when it comes to transparent information for investors.

"This transparency helps investors to truly understand the risks and to establish what a fair interest rate should be.

"With the P2P lender RateSetter now publishing even more details in its loan books to better enable risk modellers to measure the risks, 4thWay is calling for other P2P lending companies to join them by opening up their loan books.

"The bulk of the P2P lending industry, and other lenders too, are still yet to recognise that they will no longer be able to compete and grow so easily if they make it look like they have something to hide."

Lending Works made its loan book available to the general public in December, and Nick Harding, CEO at Lending Works, believes that other members of the lending industry should follow suit.

He told B&C: “We believe that P2P lending is raising the bar in terms of transparency.

“As a relatively new industry, generating and nurturing consumer confidence is paramount, and we want our customers to be making fully-informed decisions when investing with us.

“We do believe there is room for improvement among others, and it is our belief that when it comes to regulation, lenders should embrace it, and go above and beyond what is required in terms of fairness to the customer, as opposed to begrudgingly attempting to meet the bare minimum.”

All members of the P2P Finance Association (P2PFA) have been obliged to share their loan book data publicly since the beginning of this year.

In 2014, P2PFA member Landbay became the first P2P lender to share its loan book, and said this may help to restore public confidence in the financial services industry.

John Goodall, CEO and Co-founder of Landbay, told B&C: “Trust in financial services was damaged back in 2008 and at Landbay, we want to help consumers to understand that we are providing an equitable marketplace for their loans and investments with no hidden fees and an open attitude to risk.

“As a new industry, building consumer trust is paramount to our continued growth.

“Advanced technology systems allow platforms like Landbay to obtain relevant data quickly and efficiently, as we are not prohibited by incumbent infrastructure.

“The next step will no doubt be for more and more platforms to unveil their books as we seek to promote fairness, transparency and honesty in financial services.”