Created to democratise credit, P2P lenders are going after big money
Dec 5th 2019SAN FRANCISCO“GET YOUR money right,” says a giant billboard in garish, Instagram-friendly colours in San Francisco’s downtown. It is part of a campaign by SoFi, a fintech firm, to position itself as a one-stop shop for alternative finance. Founded in 2011 to cut the cost of student loans by enabling alumni to sponsor undergraduates, last year SoFi spent over $200m courting shoppers, homebuyers and young parents. It now collects funding from a wide variety of investors, including big institutions.The vision behind peer-to-peer (P2P) lending—allowing one ordinary person with spare cash to help another with a decent plan for spending it—was always a romantic one. Today only a few die-hards like RateSetter, a decade-old British lender, still hew to it; the rest, like SoFi, have diversified. New rules in Britain are the first salvo in a regulatory effort that will bring greater scrutiny. The bets P2P firms have made as they have grown will make or break them.Choose us for news analysis that respects your time and intelligenceSubscribe to The EconomistWe filter out the noise of the daily news cycle and analyse the trends that matterWe give you rigorous, deeply researched and fact-checked journalism. That’s why Americans named us their most trusted news source in 2017Available wherever you are—in print, digital and, uniquely, in audio, fully narrated by professional broadcastersThis website adheres to all nine of NewsGuard‘s standards of credibility and transparency.ORContinue reading this articleRegister with an email address