UK peer-to-peer (P2P) lending sites Zopa, Funding Circle and RateSetter have set up a trade body.
The rivals say their new P2P Finance Association will help ensure "high minimum standards of protection" for lenders and borrowers in the still young industry. Specifically, it will work to get "effective regulation" of P2P lending on the government's agenda.
Zopa, Funding Circle and RateSetter are the UK's three biggest platforms in the UK for social lending, an industry that will account for more than £100 million of loans to individuals and small businesses this year.
The association expects to add more members and is open to any outfit that "that facilitate funding via direct, one-to-one contracts between a single recipient and multiple providers of funds, where the majority of providers and borrowers are consumers or small businesses. Generally, funding is in the form of a simple loan, but other instruments may evolve over time."
The body is being run by a management committee comprising a representative from each member. Zopa CEO Giles Andrews will act as chairman for the first year before the role is given to another member.
Says Andrews: "We are very pleased to be taking this significant step in the evolution of this new and exciting sector. The Association recognises that this fast growing market will benefit from the high standards that the Peer-to-Peer Finance Association has laid down and will police amongst its members."
Rhydian Lewis, CEO, RateSetter, adds: "As an industry, we would all encourage clearer regulation of P2P finance (not least because it would address the perception that P2P is somehow not regulated). The Association will give us a platform with which to lobby for P2P to be considered on an equal footing with other financial services."
Andrews has been lobbying for regulatory changes that take into account the emerging industry for some time, initiating a campaign back in 2009 for a change to the tax laws to let people offset bad debts against their income from lending on the platform.