Peer-to-peer lending celebrates record quarter - but do investors understand the risks?

Q2 saw new lending of £507m

The P2P sector is preparing to break into the mainstream, but more needs to be done to educate investors.

The peer-to-peer lending market has just enjoyed a record-breaking quarter with new lending of £507.4m in the three months to 30 June taking total lending by the industry to businesses and individuals to £3.15bn. That further boosts confidence in the sector which is set to break into the mainstream with the launch of the Innovative Finance ISA in April next year, providing tax-free returns to P2P lenders. The market’s success has been driven by the strong potential annual returns on offer at a time when cash ISA rates have been relatively limited as the Bank of England base rate has rema...