Originally written by Timothy Adler on Small Business
Barclays Bank business banking CEO Ian Rand worries that Britain’s peer-to-peer SME lending market could be a bubble about to burst.
According to the British Business Bank, the value of peer-to-peer SME lending grew by 51pc in 2017 to £1.7bn.
However, the Barclays business banking CEO says that entrepreneurs turned down for loans by high street banks turn to alternative lenders. This could see the collapse of an alternative lender if lending criteria becomes too lax.
Rand told Small Business: “There were a lot of people that banks wouldn’t lend to who went to Wonga instead. That didn’t work out too well for them or for Wonga. I am nervous that we could be going down the same path with business lending.”
Rand said that new fintech entrants to small business lending do not have the same “duty of care” as high street banks if SMEs get into distress and cannot repay their loans. This is because some are not signatories of the Standards of Lending Practice, which all the high street banks have signed.
Distressed debtors
In the past RBS has been criticised for the small number of distressed debtors that emerged from its Global Restructuring Group recovery

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