Shares in P2P lender Funding Circle have dropped by 25% as the company warns that the uncertain economic outlook has reduced demand for loans.
The company recorded a £51m loss in 2018 and the uncertainties surrounding its growth prospects has spooked investors, who wiped 25% off its value at opening. The stock now stands at 130 pence, 70% down on the company's IPO price of 440p set during its flotation last year.
The company says it will tighten its lending criteria to higher-risk businesses and suspend plans to launch in Canada, adjusting its revenue growth expectations to 20% from previous guidance of 40%.
Samir Desai CBE, CEO and co-founder, says: "The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending criteria. As a result, revenue growth will be impacted. We recognise that this is a change from our previous guidance, but we are taking the prudent course of action for the long-term growth and development of our business. We remain confident in our aim to become the world's largest small business loans provider, helping millions of businesses to create jobs and support economic growth."