Rothschild buys into peer-to-peer lending

Jacob Rothschild has bought a stake in a peer to peer lending company that allows individuals to borrow from each other, without going through the banks.

Lord Rothschild’s investment trust, RIT Capital Partners bought into Zopa – one of several fast-growing businesses that help people lend to each other directly over the internet. Zopa has facilitated the lending of £250m since it was founded in 2005.

Zopa’s loan book and revenues were growing more than 55% per year. They estimate that lenders on its platform earn an average interest rate of 5.4% after charges and defaults.

In the UK, there are three distinct types of peer to peer lending platforms – Groups like Zopa and RateSetter offer personal loans, while others like Funding Circle offer businesses loans. Finally, Seedrs and Crowdcube allow SMEs to raise equity investment through their platforms.

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