Asked by: Adam Afriyie (Conservative - Windsor)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Innovation and Skills, what steps he plans to take to widen access to sources of alternative finance.
Answered by Anna Soubry
Alternative finance is a rapidly growing sector. Latest figures from the Peer-to-Peer Finance Association (P2PFA) show that new SME loans originated by their members increased by 89% year-on-year in the fourth quarter of 2015. Equity crowdfunded deal numbers and investment totals have also been steadily rising. The British Business Bank is an active participant in the sector and during the last 12 months has supported 3,301 businesses through the peer-to-peer platforms Funding Circle, RateSetter and Zopa.
A key element in the growth of the UK alternative finance sector has been a regulatory environment that supports innovation while protecting both investors and businesses. In addition, government is bringing into effect provisions in the Small Business, Enterprise and Employment Act 2015 which will require the largest banks - where they decline lending requests from small business customers - to offer those customers the opportunity for their details to be referred to a government-designated funding platform. These platforms will help match SMEs with alternative finance providers and will be brought into operation later this year.