Former Prestbury Holdings chief executive Lee Birkett has launched peer to peer lender eMoneyUnion.com.
The lender which started trading today offers savers potential returns of up to 12% p.a. on their investment and all borrowers are to be backed by credit worthy Personal Guarantors and an eProvision Fund.
Lee Birkett, founder and CEO, said: “Ever since the credit crunch bit hard in 2008, savers have been searching for a decent return on their money and millions of borrowers with a less than perfect credit score who really needed a loan have been left with expensive payday loans or doorstep lenders as their only options. Something needed to change.
“Having built one of the first fully regulated online finance platforms in the 90’s, I got really excited a couple of years ago when people started taking money out of their savings accounts and putting small amounts onto non-regulated social lending platforms such as Zopa and Ratesetter. I have been a great fan of these platforms and the concept ever since.
“Zopa and Ratesetter only approve 10 – 15% of their online loan applications due to their stringent credit rating requirements.
“eMoneyUnion are not competing with Zopa and Ratesetter, we want to help arrange loans for the 85 – 90% that don’t qualify with these platforms and expand the social lending economy to include family and friends where possible.”
In the last year the peer to peer sector has grown 300% and in the UK sprinted past the £500m lent barrier.
Birkett said: “A recent study by innovation charity Nest suggests that the sector has the potential to account for £12.3bn of loans a year, so we are looking forward to being an active participant in this financial revolution.
“Ever since this financial phenomenon got underway, the only thing holding me back from launching our own platform was the lack of regulatory visibility.
“This changed in March 2013 when the FSA produced a regulation paper confirming that Peer to Peer platforms are to form part of the OFT’s regulatory transition to the FCA in 2014.”
Peer to peer platforms are proposed to be categorised as a bespoke regulated credit activity under the new regulations, therefore giving enhanced protections to lenders and borrowers.
Birkett added: “It’s great to be at the start of something really big, and it feels great to be able to deliver savers the returns they desire and loans to people who need them most. It’s a real win-win.”