Hurrah for peer-to-peer funding revolution

On the way home this evening, I could, if I wished, place a £1000 bet that Leeds United will win the Championship this season and get promoted to the Premier League. The staff in the betting shop would not need to know me, they would not require me to fill in a lengthy form from which they could judge whether I should be making stupid bets, nor would I need to show them my bank account to prove I could afford the wager.

They would not need to tell me that football teams can go down as well as up, still less that on this season’s form the latter was the more likely outcome for Leeds. They would not have to know whether I have taken advice from a football expert prior to deciding on this bet, or whether I was a beginner or a sophisticated gambler. They would simply take my money because it is my money to spend as I choose. And at the end of the season when the money is lost, I could not go back to the betting shop and sue them because they did not tell me about the risks.

Meanwhile, peer-to-peer lending and crowdfunding - the process of investors and savers being introduced via the internet to people and companies who need finance - is the phenomenon of our time, the first really useful innovation in finance since the automatic cash machine. More from Anthony Hilton It promises to open the loans door for small businesses loans, make personal loans much cheaper and give savers the opportunity of higher returns, albeit with additional risk.

- February 17, 2015