Made in the UK
For those of you unfamiliar with peer-to-peer lending,
won't know that peer-to-peer lending actually
originated in the United Kingdom. In 2005 a company
launched in the UK with a new concept in banking for
the web age.
UK has been at the forefront of innovation in the financial
sector and the introduction of peer-to-peer lending,
and peer-to-business lending, has proved this to still
be the case. The P2P money website exclusively
reported in November 2011 that peer-to-peer lending
in the UK had now surpassed £100million of current loans,
and more than £200million in loans has been made by
the industry in the UK alone since Zopa launched.
Peer-to-peer lending has also spread across the world,
and had been used in micro-finance.
With the recent financial crises of 2008 to 2012
the banking industry has retreated, with banks attempting
to maintain sufficient capital to protect themselves,
and this itself has caused great pain to the private
sector, which employs 60% of the UK workforce, with
banks less willing to lend and in turn slows economic
Peer-to-peer companies such as
Funding Circle and
ThinCats are well placed to take up some of this
slack, and through these companies loans of £25million
to private sector companies have been made. The
government has come up with the idea of
Credit Easing but if the government encouraged more
peer-to-business lending they wouldn't need to try
to force banks to lend more.
Peer-to-peer lending is taking a more prominence
with around 2% of personal loans now being made through
providers such as
RateSetter. Banks are still here to stay,
but perhaps taking a slightly smaller role than they
did previously. So lets all support an industry
that was made in the UK.
P2P money blog for more snippets on peer-to-peer
Article written by
Ian Gurney, last updated on 22nd March