Published on October 2nd, 2014 | by admin0
UK P2P Industry Hits £2 Billion Mark
Right on schedule, perhaps even ahead of schedule, the UK peer-to-peer lending industry has reached the £2 billion milestone. That’s to say, the major platforms have now lent a combined £2 billion between them. Given that the total was only £1 billion nine months ago, that is astonishing growth and proof, if proof be needed, that the British public, both savers and lenders alike, are really buying into the idea of P2P. Although this is only a tiny drop in the multi-trillion pound bucket of finance, it shows that P2P is rapidly becoming a viable alternative to traditional funding methods and a solid contributor to the UK economic recovery.
So how did we get here?
Zopa, founded in early 2005, was the first UK peer-to-peer lending company and it remains the largest in the market, with over half a million customers. Five years later another company, Funding Circle, became the first to launch as a peer-to-business platform, injecting much-needed loans into companies looking to expand and diversify.
Enthusiasm that was dampened by potential problems in the P2P field (the demise of Quakle in 2011 with almost 100% defaults) were soon buoyed however when the government got behind the initiative. This was in part a result of a continued reluctance on the part of big banks to make loans, which was seen as a hindrance to the recovery.
In recent years official protection and oversight for peer-to-peer has arrived in the form of the Financial Conduct Authority, further boosting consumer confidence in the industry. And in June the Treasury announced that peer-to-peer lending could now be included in ISA wrappers.
The last five years have seen numerous small, specialist platforms spring up around the UK, many of which we’ve reported on, that look to provide loans in industries such as property development, student loans and mortgages. This time last year we were expecting growth to be impressive and it certainly hasn’t disappointed. Surely 2015 will see it go further still.