Lesson 1.2: The UK P2P Lending Market
Completion requirements
Introduction
Welcome to Lesson 1.2: "The UK P2P Lending Market." In this lesson, we will delve into the specifics of the peer-to-peer (P2P) lending market in the UK. We will cover its development, key players, market trends, and the regulatory environment. By the end of this lesson, you will have a comprehensive understanding of the UK P2P lending market and its dynamics.
Learning Objectives
- Understand the development and growth of the P2P lending market in the UK.
- Identify the key players in the UK P2P lending market.
- Analyse current market trends and future outlook.
- Recognise the impact of the regulatory environment on the UK P2P lending market.
1. Development and Growth of the UK P2P Lending Market
Early Beginnings:
- The UK P2P lending market began in 2005 with the launch of Zopa, the world's first P2P lending platform. Zopa pioneered the concept of connecting borrowers and lenders directly through an online platform.
- The success of Zopa inspired the creation of other P2P lending platforms, leading to the rapid expansion of the market.
Market Expansion:
- Since its inception, the UK P2P lending market has grown significantly, attracting a diverse range of borrowers and investors.
- The market has seen the introduction of various platforms catering to different segments, including personal loans, business loans, property loans, and green loans.
- Technological advancements and increased internet penetration have facilitated the growth of P2P lending by making it more accessible and efficient.
Regulatory Milestones:
- The regulation of the P2P lending market by the Financial Conduct Authority (FCA) in 2014 marked a significant milestone, providing a framework to ensure the industry's sustainability and consumer protection.
- Key regulatory documents, such as Policy Statement PS14/4, Consultation Paper CP18/20, and Policy Statement PS19/14, have shaped the market's development by addressing risks and setting operational standards.