2013: The year for peer-to-peer

Sam Cordon

January 9, 2013

To date nearly £400m has been loaned through peer-to-peer and peer-to-business lending and it is expected to comfortably top £600m in 2013 with the £1bn mark in sight before 2014.

Dan Rajkumar, managing director of rebuildingsociety.com, said: “This industry is undoubtedly on the cusp of a huge growth curve. Those who have already reaped the rewards of borrowing and lending in this innovative way have confidence in the model.

“Adding an extra layer of security for potential users through regulation can only be a positive move for those yet to become involved.”

Rajkumar said high levels of confidence have led to increased competition from lenders on established sites and subsequently driven down the rates lenders receive on their cash but created lower cost borrowing for businesses.

He said: “The exciting auction element of the transaction means lenders and borrowers will forever be seeing their returns rise and fall. At the moment lenders would do well to shop around to make sure they’re not lending money at rates lower than the risk they see in the business or individual borrower.”

Rajkumar said it is important for the industry to keep raising its profile and ensure a steady stream of new borrowers and lenders keep the market turning over.

He also expects to see a rise in competition for borrowers and lenders from rival platforms as entrepreneurs realise the potential of facilitating the industry.

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