Adding alternatives for investors using its platform, Swedish FundedByMe has announced the addition of peer to peer (P2P) lending along with its existing equity crowdfunding offering. The launch of P2P lending comes as the sector was one of the hottest areas of fintech in 2014, highlighted by the IPO of Lending Club and its current $8.2 billion market capitalization. For a comparison, according to data reported by the FCA, UK P2P lending grew 170% to £1.3 billion, while equity crowdfunding rose 200% to £84 million.
From providing microloans, P2P lending using non-bank platforms has grown into an efficient alternative to banks for both borrowers and investors. As a result, P2P lending platforms have been able to attract institutional investors of which the supply of funds offers decreased low terms for borrowers.
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In regards to FundedByMe, the company crowdfunded €315,000 for itself on its platform last year. According to data from Life.SREDA’s annual fintech report for 2014, since its launch, €6.6 million has been raised on the FundedByMe overcrowding platform. In launching P2P lending, the firm’s 40,000 registered investors will be able to lend to Swedish businesses, with interest rates up to 13.33%. Investors can loan from between €50 up to €20,000 on the platform.