Summary
There are three main models for people to raise money, all using social media platforms and websites. This evolution has meant that it has become increasingly professional. Last year, three of the largest peer-to-peer ­finance platforms, Funding Circle, RateSetter and Zopa launched the first trade body in the sector, the Peer-to-Peer Finance Association.

Description
As more companies turn to crowdfunding and other alternative sources of raising finance, there is a growing need for proper protection for investors. It has now come under the scrutiny of regulators.In March, the concept was acknowledged by Andy Haldane,the Bank of England’s executive director for financial stability,as a potential rival to traditional banking.

He said:“Commercial peer-to-peer lending, using the web as a conduit,is an emerging business. With open access to borrower information,held centrally and virtually,there is no reason why end-savers and end-investors cannot connect directly.The banking middle men may in time become the surplus links in the chain.”