02 April 2015

UK govt to lend £55m through P2P sites

12 December 2012  |  6138 views  |  1 London - Big Ben

Frustrated by high street banks' unwillingness to lend to small and medium sized businesses, the UK government is handing over millions of pounds to peer-to-peer lenders to distribute.

Business Secretary Vince Cable has earmarked £55 million in taxpayer funds, which will be split between four P2P players; Funding Circle, Zopa, Boost and Credit Asset Management. The money will be matched by the private sector.

Explaining the thinking behind the scheme in May, Cable said: "As businesses are continuing to struggle to get credit from their banks, developing alternative lending channels is essential so firms are less reliant on banks. Our aim is to create a more diverse financial infrastructure which better serves the needs of our small and medium-sized companies."

Funding Circle, which has helped small businesses secure over £65 million in loans since launching, has been given £20 million to distribute.

Samir Desai CEO, Funding Circle, says: "Not only is this a huge vote of confidence for peer-to-peer lending, it's a defining moment for the future of small business finance."

Zopa, which has facilitated more than £250 million in loans (although mainly between people, rather than businesses), and has just secured investment from Jacob Rothschild, has been entrusted with another £10 million.

"We hope that the additional money being lent through Zopa will help thousands of sole traders to further their business and help build the economy," says Giles Andrews, co-founder, Zopa.

Comments: (1)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 14 December, 2012, 16:41

When I casually glanced the footer of this page, I noticed a Related Story dated 31 May 2012, according to which the size of funding for P2P players was GBP 100M. Now, it's GBP 55M. Compared to the tens of billions of GBP spent / invested on bailing out banks, how much diversity will this 55 million bring about in financial infrastructure to better serve the needs of SMEs?

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

10 December, 2012
31 May, 2012
04 April, 2012
18 August, 2011
09 March, 2011
23 August, 2010

Related company news

 
Your browser is unable to support Flash files.

Top topics

Most viewed Most shared
Europe sets the pace as fintech investment...
6533 views comments | 30 tweets | 20 linkedin
UK online banking fraud losses soar 48%
6173 views comments | 16 tweets | 19 linkedin
Future Money Focus: Mariano Belinky, Santa...
5896 views comments | 12 tweets | 12 linkedin
Apple Pay users running into checkout prob...
5186 views comments | 12 tweets | 15 linkedin
Swift London Business Forum to continue di...
4897 views comments | 5 tweets | 4 linkedin

Featured job

Basic £90-110K OTE c. £200K AND NO CEILING
London based with substantial travel in the DACH Region

Find your next job