Peer-to-peer lending models are filling the gap left by banks, suggests a new report from innovation charity, NESTA.
‘Banking on Each Other’ looks at the emerging field of peer-to-peer lending to business and the processes that drive borrowers and lenders to use the platforms.
Data derived from Funding Circle, the largest peer-to-peer business lending site in the UK shows a typical lender has around £80,000 in savings and investments, and belongs to the top 20% in terms of net financial wealth.
Interest offered, risk rating and the financial track record of the company were deemed the most important factors in lenders’ decisions.
The average size of loan raised by surveyed companies was £35,000, and the average number of people that lent money to each company was 418.
Hayley Conboy, principal policy adviser for Enterprise, said: “Growth in the peer-to-peer lending market reflects an increasing appetite amongst UK businesses for alternative sources of finance.
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