An Introduction to Peer-to-Peer Lending: A European Perspective

Since the 2008 global economic and financial crisis, individuals and businesses around the world have struggled to obtain financing from traditional lenders. In Europe the difficulty in obtaining new financing has been drawn out further by the instability among member states participating in the eurozone. As a result of this ongoing financing constraint, individuals and businesses have looked to alternative sources to obtain funding. To fill this market niche, new financing models have been created in the past few years and new providers have entered the market with platforms that match investors with prospective borrowers. These services enable individuals and small to medium-sized enterprises that cannot obtain loans from traditional lenders to obtain the funding they need for a new car, to pay off credit cards, or to expand their businesses.

Mercator Advisory Group’s research report, An Introduction to Peer-to-Peer Lending: A European Perspective analyzes the new and fast growing payments segment known as peer-to-peer (P2P) lending and the business models underpinning it. This report focuses on P2P lending providers in the European market, in particular the U.K., profiling the leaders in both the consumer segment and the business lending market.

“Because P2P lending volumes today are equivalent to only a small fraction of the lending undertaken by traditional financial institutions, P2P lending platforms can be viewed as an interesting development but not a competitive threat to traditional lenders. However, the emergence of P2P lending is a valuable new source of financing in the post-2008 global economic and financial world and has the potential to close the ‘credit gap’ in mature and developing markets and allow consumers and businesses to obtain financing that can benefit the overall economy,” comments Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group and the primary author of the research.

This report contains 24 pages and 7 exhibits.

Companies mentioned in this report include: Bitbond, Funding Circle, Lending Club, Lloyds Banking Group, Peer2Peer Finance Association, Prosper, RateSetter, Royal Bank of Scotland, Santander UK, ThinCats, and Zopa. Also noted are Assetz Capital, Auxmoney, Call Credit, Comunitae, Bondura, Equifax, Finansowo, FriendsClear, FundingKnight, Lendico, Lending Works, Pret d’Union, Smartika, Smava, TrustBuddy, Zank, as well as MoneyAuction, Popfunding, Rangde, RainFin, and Society One.

Members of Mercator Advisory Group’s Global Payments Advisory Service have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.