Peer-to-Peer Lending (or P2P), enables individuals to directly lend money to borrowers without a traditional financial intermediary such as a bank or building society.
This form of debt financing has become increasingly popular over the last ten years and the democratising power of the internet has resulted in the exponential expansion of the P2P space. Thousands of investors have flooded to the platforms in the hope of extra percentiles in a climate of low interest rates, and borrowers have come in search of cheaper rates than the traditional banks, enabled by new and efficient technology.
We use it every day and it forms the basis of organised society, but where does it actually come from?
Ask most people how money is created and they might vaguely suggest the government, before feeling awkward that they don’t know the answer to such a fundamental question. Henry Ford is credited with stating that “It is well enough that people do not understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning”.
Money in the UK exists in three forms:
The news today is of the Bank of England’s decision to keep interest rates near their historic low, due in part to the steepest fall in house prices since September 2010, down by 3.1%.
The price of property is a contentious issue, a cause for celebration to those cashing in their profits, and a reason to curl up in a ball and cry for anyone under the age of 35. The average house price currently stands at 7.9 times average earnings. Returning to levels of affordability seen just 20 years ago, would mean prices need to halve. However, economic prosperity…
The debate about the interactions between income distribution and sustainable growth became more prominent after the last financial crisis where the ratio of CEO to worker pay was found to have reached dizzying heights. Putting aside moral and ideological questions relating to wage gaps, we should consider whether this status quo could cause the eventual implosion of society as we know it. Given the instinct for self-preservation perhaps this offers a stronger driver towards reform. In 2011, Andrew Berg and Jonathon Ostry of the International Monetary Fund’s research department found that once a country enters a period of growth, income…
Being at the tender age of 26, I tend to assume that everyone is acutely aware of the financial crisis of 2008 and it’s legacy on everything from interest rates to unemployment. However it turns out I’m getting old, and there are now 18 year olds beginning their undergraduate degrees who barely have any recollection the events, not to mention swathes of politicians and financiers who seem to have conveniently forgotten what the credit crash and subsequent austerity measures meant for millions of ordinary people.
So to everyone out there who wishes to be reminded of the chaos, or learn…
Investor. Stock market sleuth. Irrationally exuberant life enthusiast. Sharing the tools for financial empowerment.