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15.6 million Brits have poor credit and can’t access finance – will peer to peer lending make a difference?

15.6 million Brits have poor credit and can’t access finance – will peer to peer lending make a difference?


The internet has a hand in disruptive banking, moving us from stuffy brick-and-mortar institutions to banking from the comfort of our homes. It also allows us the freedom to make finance simpler and faster, by creating opportunities for FinTech companies to create platforms such as peer to peer lending.

While consumers stateside have benefited from social lending for years through platforms such as LendingClub and Upstart, the UK can finally welcome peer to peer lending to its shores.

Plend: the UK’s very own peer to peer platform

Plend is a peer to peer lending platform that managed to secure £700,000 in pre-seed funding, the earliest stage of funding for a new company. This means that before long, Brits will have their very own lending platform. Plend might just be a viable option for consumers looking for alternatives to government and traditional business finance.

What peer to peer lending offers

A peer to peer (P2P) lending platform offers two options. The first is as borrower where applicants complete their details and loan amount required. Documents are submitted and the application is matched with the right borrower.

The second option is to register as a lender. This allows you to lend funds to qualifying applicants and enjoy a percentage of the returns through interest, fees or a combination of both.

How Plend intends to do lending differently

Plend aims to reach those who don’t have traditional access to financing through more inclusive lending. At first, it will use the Open Banking rating to determine funding eligibility.

Open Banking provides your financial background information to the lender securely. This allows them access to key financial moments in your banking history that don’t necessarily generate a credit score.

Once Plend has enough consumers on its books, it aims to create an internal scoring system – the Plend Score – to make the lending process a little more inclusive.

Why Plend hopes to enter the untapped credit market

While there is a massive consumer market for traditional credit products, the deciding factor is your credit score. This leaves those who still need to build their credit score and those who are in the process of repairing their score out of the market. A credit score only reveals certain aspects of a financial position and can take months, if not years, to recover.

Apart from using a different scoring method to qualify its clients, Plend also looks to shorten the period between a financial dip and the restoration of what we know as ‘good credit’. For instance, bankruptcy stays on your credit report for six years, leaving you in the credit dead zone.

Plend isn’t looking to replace current credit providers

While it may seem that a new lender on the block is direct competition to major banks and other FinTechs, Plend is aiming to provide solutions for those they feel are exploited by mainstream financial services. For instance, their peer to peer lending model assesses actual affordability and provides a low-cost lending solution.

Peer to peer lending: the bottom line

If you find traditional routes to obtaining credit long-winded or simply inaccessible, peer to peer lending might be an option.

However, peer to peer lending is just one option. It’s also worth looking at other finance options such as credit cards for bad credit.

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