Peer-to-peer lending platforms advanced more than £459 million in cash to borrowers in the first three months of the year, according to industry figures.
Data from the Peer-to-Peer Finance Association (P2PFA), the trade body for the nine leading lenders in the UK market place, shows individuals and businesses have turned to the alternative finance source to borrow more than £2.6 billion.
The figures reveal borrowing in the first quarter of 2015 was up a third on the final quarter of last year with net lending of £255 million.
In 2014, the lenders advanced £1.2 billion, says the P2PFA.
P2PFA chair Christine Farnish said: “Businesses and consumers have really taken to the idea of peer-to-peer lending and this is reflected in the increase in borrowing during the first three months of this year.
Call for lending ISA
“One of the critical factors that will affect the industry in 2015 is how regulators and the government will decide whether to incorporate peer-to-peer lending in ISAs.
“If they do, individual lenders will gain tax benefits from lending their surplus cash to others.”
The P2PFA wants the government to extend ISAs into the lending market to separate lending from investing in stocks and shares, which the organisation claims is more risky than lending.
“We would like to see a standalone lending ISA to give consumers greater choice over how they invest their cash and remove any confusion over what type of investment peer-to-peer lending really is,” she said.
The figures show 111,255 investors have lent £2.6 billion to 159,083 borrowers, split evenly between consumers, small businesses and property projects.
The P2PFA has not published delinquency rates for peer-to-peer lending platforms.
|Peer-to-Peer Lending Data - May 2015|
|Lender||Cumulative lending||Consumer lending||SME lending||Property lending||Current investors||Current borrowers|
|Source: P2P Finance Association|