The democratisation of finance. January industry news
There was plenty of discussion last month around how to make your money work harder in the post-Christmas period. You can read more on how peer-to-peer lending compares to other investments available in the Daily Mail, Guardian and the Independent. Since launching, investors at Funding Circle have earned over £25 million in net interest after fees and bad debt. But remember that investor returns can go down as well as up, as your capital is at risk.
Last month RBS announced plans to formally refer small businesses they cannot help to companies such as Funding Circle. We’re very pleased to be working with both RBS and Santander, as both partnerships will help to raise awareness within the small business community of other finance options now available to them, providing you with ever more lending opportunities on the marketplace. It’s a great example of how technology companies can work alongside traditional banks in a complementary way and to the benefit of the customer.
Following the RBS news, Sachin Patel, our Head of UK Capital Markets, went on CNBC to discuss what it means for the industry. You can also read more about our partnership in the Financial Times, the Guardian and City AM.
In a special series about ‘democratising finance’, the Financial Times takes a look at how technology is improving access for both borrowers and investors. Samir Desai, our CEO, said: “In the past it wasn’t really possible for individuals to lend to businesses unless they had £100,000 or more available. Now they’re on an equal footing with big institutions. That is true democratisation.”
A second piece in the series explores the shift from ‘peer-to-peer lending’ to ‘marketplace lending’, and why more and more borrowers and investors are turning to it. Many traditional banks are still nursing weak balance sheets, constraining lending, yet Funding Circle’s marketplace is now the fourth largest net lender to small businesses in the UK.
Lend-to-save investment trust P2P Global Investments launches new shares to tempt investors attracted by up to 8% yield
P2P Global Investments, an investor on the Funding Circle marketplace, raised £200 million last May and is now looking to expand with the issue of new shares. The investment trust uses money raised to invest in loans on platforms in the UK, US and Europe.
Following a Labour Party business event where co-founder James Meekings spoke, Chuka Umunna, Shadow Business Secretary, discusses the importance of access to finance for small businesses.