The fifth annual UK Alternative Finance Industry Report has revealed a 65 per cent year-on-year increase in peer-to-peer (P2P) lending.
The P2P lending market is now worth £2 billion and small and medium-sized enterprises (SMEs) appear to be the dominant force behind it.
To put the rise of P2P lending into context, its value is equal to nearly a third (29.2 per cent) of all new bank loans to small businesses last year, nearly doubling the 2016 figure of 15.3 per cent.
Peer-to-consumer (P2C), valued at £1.4 billion was the next largest element of the alternative finance market. P2P property lending followed, valued at £1.2 billion, while invoice trading was valued at £787 million.
Bryan Zhang, the Executive Director of the Cambridge Centre for Alternative Finance, which published the report, said: “This report reflects an industry that is playing an increasingly important role in helping consumers and businesses access finance, whilst growing to become more diversified, sophisticated and institutionalised.”