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Government now backing alternative finance

Peer-to-peer lending to businesses on rise

Peer to peerThe peer-to-peer lending industry supplied £1.24 billion to growing businesses last year, according to new figures.

The sector has now loaned more than £2.1 billion in total, doubling in size since the end of 2013, and the number of lenders increased by a third, while borrowers have also increased by almost 90%.

Christine Farnish, chairman of the Peer-to-Peer Finance Association (P2PFA), said the figures support government moves to recognise the contribution made by alternative finance providers.

“These figures demonstrate the growing impact peer-to-peer lending is having on the market. Last year showed continued and solid growth in the consumer market and a significant increase in lending flow to businesses. Invoice finance and peer-to-peer finance within the property market are also growing,” she said.

“2015 will be another important year for our industry. The Government has agreed that peer-to-peer lending should become part of the ISA tax-wrapper, a decision we warmly welcome.

“Our strong view is that Government should establish a new ‘Lending ISA’ category to enable consumers to understand the difference between peer-to-peer lending, cash savings and stocks and shares investments.”

The P2PFA’s current membership includes Funding Circle, RateSetter, Zopa, ThinCats, LendInvest, Madiston LendLoanInvest, MarketInvoice, Lending Works and Landbay.

New entrants to the market include Edinburgh-based LendingCrowd and Glasgow funder Squareknot.

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