Peer-to-Peer investment involves lending your money directly to individuals or businesses without going through traditional financial intermediaries such as a bank.
Generally the process offers greater transparency and may offer a fairer rate of return than traditional investments but it does carry a degree of risk to your capital if the borrower is unable to repay their loan. In the UK, Peer-to-Peer lending is regulated by the Financial Conduct Authority (FCA).
Peer-to-Peer (P2P) Finance is an innovative way of enabling consumers and businesses to borrow and lend money. P2P enables people who have money to put it to work for competitive returns through lending to other individuals or businesses online. P2P was pioneered in the UK in 2005 and by Q4 2015 platforms have enabled lenders to provide over £4.4billion of funds to UK consumers and businesses, with expectations that the sector will continue to double in size every six months going forward.
Is P2P lending regulated? From April 1st 2014 the peer-to-peer lending industry became regulated by the Financial Conduct Authority. The regulation requires peer-to-peer lenders to have minimum operating capital requirements, meet client money requirements and adhere to a disclosure based regime.