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.
Loanio has become the latest US online person-to-person lending exchange to stop taking new loans whilst it registers promissory notes with securities authorities.
Giles Andrews, co-founder and managing director of Zopa, spoke to Finextra about how the banking crisis is encouraging more people to turn to social lending, why Zopa's US expansion didn't work out, launching in Italy and Japan, and whether P2P lending firms can benefit from integrating with other online social media.
US online person-to-person lending exchange Prosper has stopped accepting new loans as it looks to register its business with federal regulators.
© Finextra Research 2013