‘Bank on Dave’

Is this the solution to our banking troubles?

Dave Fishwick, has tried to set up his own bank. Only he can’t call it that, because he hasn’t got a banking license from the FSA – it’s actually the Burnley Savings and Loans Company, and its ‘depositors’ are really peer-to-peer lenders, since they are not protected by Government deposit insurance.

He’s successfully lending £25,000 a month from local savers to local businesses.

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A Silicon Valley Bank in London

From Oxford colleges starting their own bank, to a peer-to-peer borrowing scheme bypassing traditional lenders, the innovators cash in on the hard times…

The American Silicon Valley Bank today announced the launch of its first UK commercial banking service for the UK’s burgeoning technology industry. The bank, which is the lender of choice amongst Silicon Valley’s buzzing tech scene in the US, now poses a threat to the traditional business lending models of the UK’s high street classics. It counts Facebook and LinkedIn in its roster of clients.

Meanwhile, on Saturday it was revealed that Zopa, has now hit more than £200m worth of loans through its peer-to-peer lending system.

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Social lending: Zopa launches two- and four-year loans

Zopa is the largest social lending community, having helped match around £200m since launch in the mid-noughties.And it’s expanded its range to include two-and four-year loans, complementing the three-and five-year loans it already offered.

Borrowers taking out two-year deals through Zopa are typically enjoying even cheaper rates than three-year ones.

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Are peer-to-peer lenders the future of banking?

Websites that match up borrowers and lenders are enjoying a new wave of interest after a series of high-profile endorsements.

These websites act as a kind of broker between lenders and borrowers. The idea is that without expensive branches and the weight of regulation, they can offer better rates to both sides. So far, the established peer-to-peer lenders have kept bad debts impressively low.

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Five Key Indicators P2P Lending is Reaching a Tipping Point in the U.K.

The U.K.’s new generation of crowdsourced businesses is creating best of breed products, unencumbered by the legacy of traditional banking margins and approaches. Coming from an online world, the focus is on leaner, smarter models that disrupt the way traditional organisations have approached real world finance.

Recent indications suggest that the peer-to-peer lending industry in the United Kingdom is nearing its tipping point. The sector is servicing a universal need and developing innovative, vibrant business models to compete against each other.

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Peer-to-peer lending via the internet hits £250m

Lending via three websites that link savers with borrowers – bypassing the banking system – has topped £250m.

The “new age” finance carries no protection for deposits, but is being tipped as a serious threat to traditional banks.

The peer-to-peer sites are led by Zopa, which has lent more than £200m since it started in 2005.

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How peers can solve borrowing headaches

Lending without the middleman is booming – the premise behind social lending is to cut out the middleman by matching lenders and borrowers directly, and to mutual benefit. So, borrowers can bypass reluctant banks and access lower interest rates and investors beat the paltry high street returns.

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