Responding to today’s Autumn Statement announcement that the government will be supporting Peer to Peer (P2P) and crowdfunding platforms through a package of measures to remove barriers to their growth from regulation and tax rules, Warren Mead, head of challenger banking and alternative finance at KPMG, said "The tone of today’s announcement creates a level-playing field for P2P and crowdfunding platforms. It is in-line with the continual trend to increase competition in the finance marketplace.
“The consultation on whether to extend ISA eligibility to lenders using crowdfunded debt-based securities, new bad debt relief for lending through P2P platforms, and an intention to review regulation preventing institutions lending through P2P, will largely be welcomed by alternative finance industry.
“P2P lenders are growing significantly, with some by over 100% per year. The support for P2P and crowdfunding platforms means that it is all systems go. It won’t take long before these players begin securing meaningful market share in the higher value parts of banking.
“However, as this is an emerging new line of funding, the industry is pushing for more regulation, which might reduce the pace of growth. Like with investment products, investors should remember that their investments are not covered by the deposit guarantee.”
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Simon Chan, PR Assistant Manager, KPMG
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.