U.K government has decided to board P2P lending train, it will lend £30 million through lending sites Zopa and Funding Circle

Despite the efforts of U.K government, they are unable to compel the high street banks to start lending money to small businesses. This can become a big problem for economy of U.K. To solve this problem a latest solution given by the Department for Business Innovation and Skills is boarding the P2P lending train.
The government of U.K has promised to lend tax payer's money to SME's. This will be done with the help of alternative finance scheme. The 'Zopa' and 'Funding Circle' are the two sites for P2P lending and they will benefit from this. Zopa will receive 10m whereas Funding Circle will receive 20m.If the British government gets approval from parliament, then they will be using both the sites and will lend money to businesses that are in connection with P2P lending platform.

According to Vince Cable the business secretary, a wide range of financial options should be given to the medium and small size businesses and it should also include non-bank lending options. He further said that at present the new versions of finance are present in small scale. They should try to give more competition to lending market.

The word small scale used by Vince Cable is appropriate because 30 million is not a great amount and it will not have much effect on boosting the economy of U.K. But according to one of the Britain's supermarket, even the little measures can help to boost the economy. The Union Square Ventures and Index are backing up Funding Circle. The target of Funding Circle is SMEs and since two years (from the day of launch to the present day) they have managed to lend 65 million to over 1,300 UK businesses through their platform. In the previous month they lent 7 million alone.

Few days ago Zopa announced that they are starting the latest round of funding. Previously they have raised $40 million. The P2P lending sector is being appreciated by major players in the businesses

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