Research from the Nesta survey shows that the peer-to-peer sector will continue to grow rapidly over the next few years.
Rhydian Lewis, Founder and Chief Executive, RateSetter commented: “The potential for growth is extremely exciting in what is still, despite its success, a relatively untapped market – with 42% of UK consumers remaining completely unaware of P2P.
“A third of active lenders have only started using the model since the beginning of 2014 and the market has subsequently doubled. As awareness continues to increase, we expect further exponential growth, cementing P2Ps position as a new and respected alternative to traditional financial institutions.
“At RateSetter, we have witnessed phenomenal growth this year, lending over £236m, an annualised year to date growth rate of over 205%. And with 92% of our lenders, and 95% of our borrowers, saying they would return to P2P we don’t expect this to slow down.
“Inclusion in ISAs will further boost the sector, with over 60% of our lenders saying they will lend more once P2P qualifies for the ISA scheme. With this on the horizon for early 2015, there is a feeling that we are on the brink of a spectacular change in the financial landscape.”
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When choosing peer-to-peer lending, 92% of people have stated that knowing their money was protected by a provision fund was an important factor.
Rhydian Lewis, Founder and Chief Executive, RateSetter commented: “This landslide figure is substantiation that the nation trusts in the safeguards put in place by the platforms to protect their money.
“Peer-to-peer appeals to those seeking a higher income from their money. For this reason there is simply no place for costly FSCS coverage within the sector, and to seek it would be to disregard the industry’s mission to deliver a decent return for lenders. We are instead offering effective and bespoke risk mitigation systems which work in the best interests of consumers.
“RateSetter’s Provision Fund was the first of its type in the industry and remains the largest. Whilst there is no guarantee, no lender has ever lost any money. It has allowed us to deliver predictable and sound returns that outstrip those on offer from FSCS-covered savings accounts. It ensures that our growth is supported by a sustainable business model.”