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Peer-to-peer lending and financial innovation in the United Kingdom - Ulrich Atz and David Bholat

Author

Listed:
  • Atz, Ulrich

    () (Bank of England)

  • Bholat, David

    () (Bank of England)

Abstract

Peer-to-peer (P2P) lending — direct lending between lenders and borrowers online outside traditional financial intermediaries like banks — first emerged in the United Kingdom and the world with the launch of Zopa in 2005. Our paper provides a quantitative analysis of nearly 14 million loan agreements. We lay bare the history of P2P lending from its beginning, showing the regional geography of P2P lending in the United Kingdom. We suggest that the history of P2P lending can shed light on financial innovation in general. We base our conclusions on four semi-structured interviews with the founders of the three most significant UK P2P platforms (Zopa, RateSetter, and Funding Circle).

Suggested Citation

  • Atz, Ulrich & Bholat, David, 2016. "Peer-to-peer lending and financial innovation in the United Kingdom - Ulrich Atz and David Bholat," Bank of England working papers 598, Bank of England.
    • Handle: RePEc:boe:boeewp:0598
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2016/peer-to-peer-lending-and-financial-innovation-in-the-uk.pdf?la=en&hash=731A6951C1EEFF82BEBC281516E464139D996743
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    References listed on IDEAS

    as
    1. Robert J. Gordon, 2012. "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds," NBER Working Papers 18315, National Bureau of Economic Research, Inc.
    2. Ajay K. Agrawal & Christian Catalini & Avi Goldfarb, 2011. "The Geography of Crowdfunding," NBER Working Papers 16820, National Bureau of Economic Research, Inc.
    3. Bholat, David, 2015. "Big data and central banks," Bank of England Quarterly Bulletin, Bank of England, vol. 55(1), pages 86-93.
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    Cited by:

    1. Chakraborty, Chiranjit & Joseph, Andreas, 2017. "Machine learning at central banks," Bank of England working papers 674, Bank of England.

    More about this item

    Keywords

    Peer-to-peer lending; crowdfunding; innovation; fintech; big data;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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