P2P Money Blog

There is a very interesting article in the Financial Times regarding a possible tie up between Santander and Funding Circle.

The UK arm of the Spanish bank is in discussions with Funding Circle - one of  the largest peer-to-peer lenders - to join forces on loans to small and  medium-sized businesses, according to people close to the process.

The article also goes on to state that Santander would be looking to lend on larger loans, and P2P money would expect this to be similar to government lending on the platform.

This possibility is bound to draw some comments that this is moving away from peer-to-peer lending, and could potentially become business-only lending, excluding the lenders that started the original concept.  Government lending on the platform drew some criticism, but a move to include banks, the very same organizations that peer-to-peer lending is competing against, would attract further concern.

While it is entirely possible for a bank to start-up a peer-to-peer company, which is something P2P money would welcome, we would caution against having commercial banks lending alongside individuals.  Such organizations have such commercial presence that they could effectively dictate lending rates and have undue influence over the company.  You would also have to question why a bank would want to effectively outsource its lending, rather than perform that task internally.

We'll report on any further developments.

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