The European Investment Bank to Lend to UK SMEs through P2P Lending
During the last couple of years, as a consequence of the outstanding growth of peer-to-peer lending worldwide, we have seen cases of big and established banks including national institutions entering into partnerships with online lending marketplaces. This is particularly true for UK market, which being more advanced and active than others, has witnessed important partnerships between the Royal Bank of Scotland and two of the major nationals lending platforms. However, at the end of September, the news of an unprecedented partnership, involving an European institution and a lending marketplace, positivity shacked the market. The European Investment Bank (EIB) announced that it is preparing to lend £100 million to UK small businesses through the peer-to-peer lender Funding Circle, in a move it hopes to replicate in other countries.
The deal indicates growing acceptance of peer-to-peer, or marketplace lending, as a valid route for channelling government-backed funds to small and medium-sized enterprises.“This is an interesting direct model for supporting small businesses, which has the potential to be quite efficient,” said EIB.
While the terms of agreement with Funding Circle are still being defined, EIB declared that it is intentioned to roll out similar partnerships with other platforms operating in other EU countries. This is of course an excellent news for European SMEs and the regional online lending sector and hopefully it will be imitated by other public institutions as well.
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