P2P lenders emerged in 2005 with the advent of Zopa in the UK. Operating online, these sites connect investors and borrowers, ranging from individuals seeking a loan for an extension to small businesses attempting to grow.

Unlike banks, P2P sites do not take deposits and lend themselves, but act as an exchange, making money from fees and commissions.

For borrowers, a P2P lender can offer loans much faster than a bank. Lenders can receive high rates of interest of about 6 per cent at a time of record low bank interest rates.