Published on July 9th, 2013 | by P2P Lending Advice


A new co-operative leads the way in peer to peer lending

Peer to peer lending has been around in the UK since 2005, linking lenders and borrowers through the internet. Now a British agricultural co-operative has used the peer to peer concept specifically for farmers who, due to the nature of their business, often need short-term loans whilst crops or livestock are maturing.

Anglia Farmers, an agricultural co-operative with 50 years of experience and a turn-over of over £250 million per annum, has set up AF Finance to handle a new peer to peer lending scheme for farmers. Funds from lenders are pooled in the scheme which is administered online by a former Barclays Bank manager employed by the group. The lenders and borrowers are all members of the co-operative so both have a known creditworthiness going back many years so the risk of the scheme is greatly reduced. On average, each member of Anglia Farmers conducts £85,000 worth of business through the co-operative every year so the group has a detailed trading history of each borrower and lender prior to the peer to peer lending being authorised.

AF Finance acts as the online intermediary between the members who want to lend and borrow on a short-term basis. Borrowers pay 6% interest per year which, after a service deduction from the finance group, is passed directly on to the lenders.  The scheme has proved to be a great success for all parties with £1.3million borrowed in 9 months of trading in 2012 and a further £1.5million so far this year.

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