City moves in on peer-to-peer lending | ft.com
Peer-to-Peer lending in the UK has suddenly become fashionable. First Andy Haldane mentioned P2P as a valid and needed catalyst for innovation in financial services on Mar 14th. Now we have demand for P2P returns from City investors, and finally the government are getting into the P2P business.
As this type of “direct lending” has expanded into business loans – through websites such as Funding Circle and ThinCats – it has started to attract the attention of more sophisticated clients who are keen to lend larger sums. Funding Circle lifted the maximum loan limit from £100,000 to £250,000 at the start of this year.
The increased interest comes as the government is also gearing up to invest up to £100m in peer-to-peer groups that facilitate loans for small and medium-sized enterprises. The chancellor earmarked these funds in the Budget and the Department for Business, Innovation and Skills is expected to provide details of how they will be allocated next month.