Member Article

Ex-Lloyds chief executive joins P2P lender as 'alternative' finance goes mainstream

Peer-to-peer (P2P) small business lender, Funding Circle, has announced that former Lloyds Banking Group Chief Executive, Eric Daniels has joined its board.

The London-based FinTech firm welcomes the 65-year-old as part of its risk and audit committees, and follows similar appointments in recent months of figures across traditional banking and finance sectors as it looks to embark on international expansion.

Back in July the P2P lender appointed former Credit Suisse and Nomura exec Jeremy Bennett as its Global Chief Financial Officer, while Jerome Le Luel, former Barclay’s Chief Risk Officer, joined the firm in October 2015.

Daniels is most famous for helming the bailed-out bank through the 2008 financial crisis and had a significant portion of his seven-figure bonus package clawed back in 2012 following the payment protection insurance (PPI) mis selling scandal.

Founded in 2010, Funding Circle has become one of the foremost names in the P2P lending sector, styling itself as a marketplace where small to medium-sized businesses can access funding from investors.

The City of London firm has recently embarked upon expansion into the US and Europe, bolstered by the 190 people it currently employs in San Francisco.

His rather checkered past aside, the appointment of such a big name in banking as Daniels attests to the growing acceptance of the P2P sector as a mainstream source of finance for businesses and an attractive proposition for investors.

According to Bloomberg, Daniels commented that there had been a ‘sea change’ in traditional banking which has made it more difficult for them to lend like they have in the past, leaving P2P lenders poised to pick up the slack.

He said: “New capital and risk-weighting requirements have turned the industry upside down, and it’s become difficult for institutions to continue lending the way they did before. That’s left an opening, and Funding Circle has deftly taken advantage of that.”

It is clear that the increasing proliferation of P2P lending platforms, fuelled by the outdated lending practices of traditional lending institutions and the need for startups and smaller businesses to quickly access capital, has seen this formerly niche, ‘alternative’ form of lending move into the mainstream.

Touching upon this trend, and Funding Circle’s wider vision, Chief Executive and Founder, Samir Desai, said that the firm’s ambitions had always been focused on modelling itself on traditional financial markets and exchanges.

“When we first launched Funding Circle our vision was to create the infrastructure – similar to a stock exchange or bond market – where individuals, financial institutions and governments could all lend to creditworthy small businesses.

“Eric’s deep experience and knowledge of global financial services will be integral to us as we continue to work towards fulfilling this vision,” he said.