The firm originally began as a pawnbroker but moved into property loans – however, by the end of 2019 it was struggling and announced the formal run-off of its loan book with no new investment being taken.
According to The Daily Telegraph, when announcing its closure to new business, around 44 per cent of its £20m loan book, worth around £9m was in default.
At the time MoneyThing said it had completed £92.2m total lending, with £71.9m capital repaid and £8.1m interest paid.
While the firm had been managing the run-off period over the last year, the move into administration came after it could not reach an agreement with one of its borrowers.
“The directors of MoneyThing have taken this decision in order to protect the interests of the companies’ creditors as a whole,” it said.
“We have taken into account the tougher trading conditions experienced in 2020 as well as litigation by a MoneyThing borrower.
“The Joint Administrators will assume responsibility for managing the companies’ affairs. They will continue the orderly wind-down of the remaining MoneyThing peer to peer loan book, return monies to lenders and conclude the firm’s business activities.
“The appointment is not expected to have a material impact on lenders or borrowers,” they added.
The Financial Conduct Authority (FCA) confirmed the move into administration and said there was no need for investors to do anything.
“Investors should shortly receive an update from the joint administrators through the MoneyThing platform with further information,” it said.
“The joint administrators, Tom Straw and Milan Vuceljic of Moorfields Advisory, are now responsible for the business of MoneyThing Capital Limited.”
Institutional capital and loss of consumer confidence
It blamed the influx of institutional capital, economic uncertainty and the collapse of Lendy and Funding Secure for hitting confidence in the sector as the main reason for its wind down.
“As a small, self-select P2P platform entirely funded by retail money, we cannot be certain that we can fund new loans with the current low level of lender confidence,” it said a year ago.
“As a result, it has become increasingly difficult for us to compete and we expect those market conditions to continue. As such we have taken the decision to wind-down.”