Non-bank lending growing in importance. November industry news
Vince Cable’s vision of a new British business bank with a clean balance sheet and an ability to expand lending rapidly to small businesses, is now a reality. Brussels gave the green light for the new bank to become an independent lender with a chief executive and board managing about £4bn of state money. Of all the G8 members, Britain has so far been the only country without an institution that deals with funding for small and medium-sized companies.
The strength of the UK’s booming peer-to-peer lending industry was underlined when our friends at Zopa revealed that investors have lent a quarter of a billion pounds in personal loans in just the last 12 months. We also saw a record October and November, with investors lending £30 million and £35 million to small businesses respectively.
It’s no surprise to us to hear that levels of non-bank lending in Europe, particularly among small businesses, is rising fast. But figures released this month, by law firm Allen & Overy, confirmed that it is now almost as important to European companies as bank debt.
The Competition and Markets Authority initiated a full-blown inquiry into the lack of competition and transparency in current accounts and small business banking, prompting the Financial Times to take a look at the impact of challenger banks over the last period.
Nesta published their third and largest piece of research on the alternative finance industry. Two years ago, their first report mostly included data about Funding Circle, and now it includes data from over 20 companies – a sign of the growth of the industry.
Following our CEO Samir’s speech at LendIt Europe, City AM published a piece on how we are planning to open up lending to small businesses to large investors such as pension funds and insurers in due course. This will allow us to create a sustainable marketplace with a diverse range of investors, big and small, ultimately bringing more lending opportunities to all.
Unfortunately we also heard this month that peer-to-peer lending inclusion in ISAs may be delayed until after the general election in May. However we’re still confident that it will happen and we continue to be part of the conversations with government. We will be soon be posting an update on our consultation response on the blog.
Co-founder James Meekings has been shortlisted for business person of the year in the Sunday Times! The winner of the annual competition will be chosen from a shortlist compiled by the paper, but they want your views so email email@example.com and the winner will be revealed in their December 28 edition.