‘Significant year’ as peer-to-peer lending sees its popularity soar

Cumulative lending at the end of quarter four in 2013 hit £843m compared to £381m a year earlier, according to a report published by the Peer-to-Peer Finance Association.

The data also shows at the end of 2013 there were more than 3,700 business borrowers, 70,000 consumer borrowers as well as more than 86,000 active lenders in the sector.

Christine Farnish, chair of the Peer-to-Peer Finance Association, said: “More and more people now recognise the benefits that P2P (peer-to-peer) lending can offer. No wonder the sector is growing so fast. 2014 will be a significant year for the industry. We are about to pass the £1bn milestone of total monies lent and in April we become regulated by the Financial Conduct Authority, something we strongly support.”

Daniel Rajkumar, managing director of Leeds-based peer-to-peer lending marketplace Rebuildingsociety.com, which also facilitates business loans, said he expects both supply and demand to grow strongly in 2014 as awareness and confidence increases among SMEs and consumers.

He added: “Moreover, the introduction of funds from the City, mirroring trends in the US where institutional funding has enabled dramatic growth, should ensure an even faster expansion.

“With regulation of the P2P market in effect from April 1 and plans to include the asset class in ISAs, this could be the start of a huge upsurge in lending volumes.”

A flurry of activity in the peer-to-peer lending market in recent weeks has seen the launch Lending Works, which allows people to lend their savings to creditworthy people requiring finance.