Funding Circle blazes P2P securitisation trail

Funding Circle is set to be the first European peer-to-peer lender to have loans from its platform securitised, setting a precedent that could attract additional funding to the industry.

The company, which has facilitated $2bn of loans to SMEs since 2010, connects lenders and borrowers through an online platform. Its debut securitisation will be backed by £130m of loans and marketed early next week. Funding Circle's deal underscores rapid growth in alternative platforms as traditional lending continues to stagnate across Europe.

Monica Curti, a vice-president at Moody's, said: 'Up until now SMEs are very linked to the banking sector. We do see some opportunity for the future of the securitisation of marketplace lending backed by SME loans.'

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