It is very likely that including peer-to-peer lending in ISAs would give an incredible boost to the British P2P market: it has been estimated that the total P2P market value would jump from just under £2 billion up £45 billion in only a few years, creating approximately 75,000 new jobs.
Although the numbers paint a bright future, some are concerned that it will not look so rosy. In particular, one of the main concerns is that the huge influx of ISAs money will create some difficulties in the matchmaking process done by the platforms, which may lower their lending standards in order to match the number of lenders with borrowers. Nevertheless, this kind of problem may be prevented by adopting a code of conduct or a quality label, which guarantees that the platforms keep respecting some minimum quality requirements.
Including peer-to-peer in ISAs will definitely give a big push to this fast growing market and will bring a good dose of competition to the banking sector, which hopefully will also foster access to finance for British SMEs and encourage collaboration between the traditional finance sector and crowdinvesting.
Crowd Valley provides technology and connections to third-party services for credit scoring, AML and KYC processes for the P2P market and we are excited to see how our P2P customers will benefit from this market’s growth in the UK.
Read S. (2014). New ISAs: Government set to include peer-to-peer lending in tax-free savings accounts. The Indipendent
Government to consult on new Peer-to-Peer lending ISA (2014). BBC.com
Image credit to: Photo Monkey http://bit.ly/1xEp5zs
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.