Implications of SS becoming too popular

Hundreds of new joiners a day?
I would suggest to read the real data before writing things which are totally wrong.

Yes SS has a good growth rate and an increasing customer base. But let's not introduce totally non existent data.

So that's Hundreds every week then.
And (imho) that is a good thing, steady growth in investor numbers combined with steady growth in loan originations, not too fast and not too slow.  Of course reality is that both likely experience peaks and troughs.
Brian

Unfortunately you have made far too many assumptions without thinking through the history of SS.

Your whole premise relies on having a static loan book, ie, the loan book size remains the same but the number of investors increases and then they get a smaller bit of the "pie". However those of us who have followed SS for more than a few weeks will have noted several things. 

1. The "liquidity" of the SM is variable, anything from loans going in mili-seconds to days. This will not change.
2. People have been "gaming" the pre-funding right from the start, asking for more than they want. So when a prefund comes in at say 60%, you may find that most people actually got what they wanted in the first place, and only a few got less than they actually wanted. Recent SS changes (or possible changes) have tried to address this gaming, and we may get to a stage where gaming is not existant.
3. As more people join and invest, SS can increase the loan book pot and offer more loans, and people should have no problems investing or re-investing.

And to be honest the word "popular" should be taken into context. Currently there are 7826 people signed up with SS, which if my maths is right, that 0.016% of the UK's adult population. 


 

It is worth remembering that many of the players in the PBL arena are fixed size (often family) funds (I dont know whether this applies to the DFL arena). They are unable to increase their size easily.

P2P lenders (like SS) have the opportunity to draw funds from us, they are therefore potentially able to grow very much faster than the 'family' funds. They are also able to satisfy a borrower's request in one hit, rather than a bit from this 'family' fund and a bit from that fund.

As a result of these advantages. Borrower's agents will naturally gravitate to the P2P lenders and they will probably grow their market %age quite quickly.

Which of course begs the question - What happens when there is a downturn?

Isn't that lower interest rates?