£2 billion worth of loans have now been processed by peer-to-peer (P2P) lending platforms, according to new statistics released by the investment publication, AltFi.

The data showed that the sector has grown 158% this year, with both businesses and consumers taking advantage of this emerging form of finance.

P2P lending allows lenders to collectively finance loans, cutting out the bureaucracy associated with traditional financing.

Borrowers pitch their loans to a community of lenders, including an amount and a summary of what the money will be used for. Lenders then decide whether to invest and, if so, how much.

The industry is growing rapidly in popularity, with over £1 billion worth of loans processed in the last 9 months alone.

Giles Andrews, CEO of P2P lendinf service, Zopa, said:

 “To surpass the £2bn mark is a massive achievement for the UK market. This has been achieved by UK consumers willing to think outside the banks. What started out 10 tears ago as an idea in a bran with Zopa is now one of the most innovative and disruptive industries in the world.

“The UK peer-to-peer lending industry is growing faster than ever and we look forward to continuing to reshape the future of finance in the UK.”

Image by jlmaral