Peer-to-peer lending
Good Practice Guide
Publication date:
16 April 2020
Last updated:
18 December 2023
Author(s):
Personal Finance Society, Proplend
Guidance on peer-to-peer lending.
Peer-to-peer (P2P) lending, also known as online lending or loan-based crowdfunding, refers to a particular subset of crowdfunding, whereby money is lent to individuals or businesses on the expectation of regular interest payments (and capital repayments).
It’s an activity that has been regulated by the Financial Conduct Authority (FCA) since April 2014. It falls under
article 36H of the Regulated Activities Order of the Financial Services and Markets Act (FSMA) 2000, as ‘operating an electronic system in relation to lending’.
P2P lending has become something of a controversial business. Some providers haven’t particularly covered themselves in glory and the public may not fully understand the associated investment risk.
Distancing himself from negative comments made in February, Lord Adair Turner told the LendIt Europe conference P2P lending platforms could become a “stable and secure” element of credit provision, and even help prevent credit crunches, if they remain simple and transparent.
This Good Practice Guide, written in association with Proplend, provides an overview as well as incorporating the PS19/14 regulations which came into effect on 9 December 2019.
Read the Good Practice Guide HERE (PDF)
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.
