Peer-to-peer lending has grown 50% in five months

LAUNCHPAD: Lending between people and businesses hit £1.5bn over the bank holiday, but that's still just a drop in a very large ocean.

by Rachel Savage

Peer-to-peer (P2P) lending and other types of crowdfunding have been ‘A Thing’ for a while, as any avid readers of MT will know. They’re also growing pretty speedily: P2P lending in the UK has risen 50% to more than £1.5bn since the start of the year, according to AltFi Data, which tracks the alternative finance market.
 
If it keeps growing at this rate, the total leant through P2P websites since 2005, when Zopa first launched, will pass the £2.75bn mark by the end of the year. That would be a pretty staggering-sounding expansion of 175% (although AltFi managing director Sam Griffiths told MT that some smaller lenders had been added to their index last month, meaning the growth isn’t entirely organic).
 
MT is happy to cheer this along, given bank lending to small businesses is pretty dire (to people, not so much – just look at the housing market, chivvied along of course by Help to Buy) However, as with all things, this needs to be kept in perspective: expanding from a small base is bound to look impressive.
 
To put that £1.5bn in context, the number of mortgages (not personal or business or any other type of loans) approved in April alone was £12.2bn. As Funding Circle director Ed Wray told MT a couple of months ago, ‘It’s a long way away until P2P is funding BP’s next $7bn revolving loan.’

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