What is Peer to Peer (P2P) Lending?

Peer-to-peer lending, sometimes abbreviated P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders directly with borrowers. Since the peer-to-peer lending companies offering these services operate entirely online, they can run with lower overhead and provide the service more cheaply than traditional financial institutions. As a result, lenders often earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates, even after the P2P lending company has taken a fee for providing the match-making platform and credit checking the borrower. (Source: WikiPedia)

Total Amount Lent by UK P2P Lenders Q4 2014 vs Q4 2015

P2P lending in the UK

P2P lending in the UK is a regulated industry with over £2.2 billion lent in 2015, but the rest of Europe is just starting out.

P2P lenders have gained experience and awareness having been in the UK for over a decade. They’ve also benefited from a supportive regulator.

Source: Business Insider

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