Peer-to-Peer Lending and Financial Innovation in the United Kingdom

26 Pages Posted: 30 Apr 2016 Last revised: 5 May 2016

See all articles by David Bholat

David Bholat

University of Essex

Ulrich Atz

Open Data Institute

Multiple version iconThere are 2 versions of this paper

Date Written: April 29, 2016

Abstract

Peer-to-peer (P2P) lending — direct lending between lenders and borrowers online outside traditional financial intermediaries like banks — first emerged in the United Kingdom and the world with the launch of Zopa in 2005. Our paper provides a quantitative analysis of nearly 14 million loan agreements. We lay bare the history of P2P lending from its beginning, showing the regional geography of P2P lending in the United Kingdom. We suggest that the history of P2P lending can shed light on financial innovation in general. We base our conclusions on four semi-structured interviews with the founders of the three most significant UK P2P platforms (Zopa, RateSetter, and Funding Circle).

Keywords: Peer-to-peer lending, crowdfunding, innovation, fintech, big data

JEL Classification: G23, L26, O30

Suggested Citation

Bholat, David and Atz, Ulrich, Peer-to-Peer Lending and Financial Innovation in the United Kingdom (April 29, 2016). Bank of England Working Paper No. 598, Available at SSRN: https://ssrn.com/abstract=2772585 or http://dx.doi.org/10.2139/ssrn.2772585

David Bholat (Contact Author)

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Ulrich Atz

Open Data Institute ( email )

65 Clifton St
Floor 3,
London, EC2A 4JE
United Kingdom

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