P2p Lending: Opportunity For Lenders as SMEs Outside London Struggle to Access Fund
High-growth enterprises are emerging all over London, but research has claimed that those outside the country are striving to acquire finance.
A publication by the Institute for Public Policy Research (IPPR) stated that there are 12,000 high-growth businesses throughout the UK – which it describes as firms having more than 10 employees and a staff or turnover growth rate of 20% in three years.
Even so, the think-tank found that source of fund is to a great degree locally imbalanced and encouraged the government to give the British Organisation Bank a specific order to help enterprises outside of the Capital.
It additionally required an evaluation of the enterprise investment scheme and seed enterprise investment scheme to ensure that these businesses could benefit.
The report, which took a gander at a wide range of money lenders, found that the regional pattern of P2P lending was just like other sources of fund.
Commercial companies and individuals in the South East and London get the most astounding extent of peer-to-peer lending, while Wales and the North East recorded a portion of the least aggregate loan sums. In any case, considering the variation in local populaces, businesses and individuals in these territories have among the most abnormal amounts of P2P lending per head.
“While borrowers are reasonably well distributed across the regions, there are substantially more lenders active in London and the South East,” the article said.“ [But] the regional allocation of funds on these sites is not a deliberate decision made by lenders. In the case of RateSetter for example, investors do not know which individuals or businesses they are investing in.”
“This suggests the platforms may offer scope for lenders on P2P lending sites and investors on equity-based crowdfunding platforms to lend further afield than their traditional bank and equity rivals would consider, without the need for a strong regional presence.”
The study also found that there was an absence of awareness of peer-to-peer lending among little firms.
Furthermore, the report said that despite recent remarkable growth, Nesta found that 76% of SMEs were not aware of peer-to-peer lending.
The report highlighted concerns recently communicated by Lord Adair Turner, that the sector could make bigger misfortunes later on.
“Due to its status as a new market, with little experience of economic downturn, the exact nature of the peer-to-peer business model, and the risks involved in both lending and borrowing via these sites relative to those associated with traditional banks, may not be fully known and understood by peer-to-peer customers.”