P2P lending

P2P (peer-to-peer) lending platforms match borrowers directly with retail or institutional lenders, skipping the bank as principal. LendingClub and Prosper in the US, Zopa in the UK, Funding Circle for small business. The platform handles origination, credit scoring, servicing, and collections; it earns a fee rather than interest spread. The pitch to lenders was "better yields than savings"; the pitch to borrowers was "better rates than credit cards." In practice the model has mostly converged back toward banks — LendingClub bought a bank, Prosper funds most loans institutionally — because funding at scale is cheaper from banks than retail lenders, and regulation treats platforms increasingly like lenders anyway.