Peer-to-peer lending via the internet hits £250m

8 June 2012 Last updated at 19:00 ET

Peer-to-peer lending via the internet hits £250m
By Simon Gompertz

Personal finance correspondent, BBC News

Lynne Martin’s money is spread among hundreds of borrowers, thus reducing risk Continue reading the main story
Savings and InvestmentDo some hedge funds mislead their investors?
Will investment charges become clearer?
Q&A: Is Santander UK a safe bank?
Three years of record-low rates
Lending via three websites that link savers with borrowers – bypassing the banking system – has topped £250m.

The “new age” finance carries no protection for deposits, but is being tipped as a serious threat to traditional banks.

The peer-to-peer sites are led by Zopa, which has lent more than £200m since it started in 2005.

Funding Circle, specialising in business loans, has topped £34m, and RateSetter has reached £24m

Click here to read more