Peer-to-peer lending

Peer-to-peer (P2P) lending, also known as online lending or loan-based crowdfunding, refers to a particular subset of crowdfunding, whereby money is lent to individuals or businesses on the expectation of regular interest payments (and capital repayments).

It’s an activity that has been regulated by the Financial Conduct Authority (FCA) since April 2014. It falls under
article 36H of the Regulated Activities Order of the Financial Services and Markets Act (FSMA) 2000, as ‘operating an electronic system in relation to lending’.

P2P lending has become something of a controversial business. Some providers haven’t particularly covered themselves in glory and the public may not fully understand the associated investment risk.

Distancing himself from negative comments made in February, Lord Adair Turner told the LendIt Europe conference P2P lending platforms could become a “stable and secure” element of credit provision, and even help prevent credit crunches, if they remain simple and transparent.

This Good Practice Guide, written in association with Proplend, provides an overview as well as incorporating the PS19/14 regulations which came into effect on 9 December 2019.

Read the Good Practice Guide HERE (PDF)