The UK government is preparing to allow the inclusion of peer-to-peer lending within Isas, giving investors a tax-free return on their investments, according to the Telegraph.
The world's first peer to peer lender, Zopa has now lent over £400 million to UK borrowers since it launched in 2005. Record lending levels highlight how consumers are fully embracing peer to peer lending as an alternative way to save and borrow which bypasses the banks to get a better deal.
Zopa has helped savers to lend to borrowers looking for personal loans for over 8 years, providing better returns to savers and lower rate loans to borrowers.
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.
Jacob Rothschild's investment trust, RIT Capital Partners, has acquired a stake in peer-to-peer lender Zopa. Financial details of the deal have not been revealed.
Following many months of record breaking loan figures, the total amount lent by Zopa savers to Zopa borrowers has passed £250 million - a quarter of a billion pounds. This follows loan figures in October that were 90% up on the same month last year.
UK peer-to-peer (P2P) lending sites Zopa, Funding Circle and RateSetter have set up a trade body.
UK peer-to-peer lender Zopa is reporting a surge in consumer interest as traditional banks continue to tighten credit lines and milk the spreads on interest-bearing loans.
With traditional high street banks losing public confidence in the wake of the financial crisis, online provider first direct and P2P lender Zopa have taken advantage to emerge as the industry's most trusted players, according to research from Moneywise magazine.
UK-based person-to-person lending pioneer Zopa is set to get a first whiff of competition on its home turf with the launch next month of a new online lending facility Yes-Secure.
© Finextra Research 2013