With UK banks restricting lending, partly because of reserve contraints, and mostly because they are sitting on lots of bad debt that they do not want to admit - I think it is time for governments to look at other forms of lending to provide some much needed competition.
Peer lending has been around for a few years and it is an obvious choice for cutting out the banking middle man. It just need some extra backing from governments to push it more mainstream.
It seems too good to be true, a borrower pays less interest than a regular bank loan, and a saver receives more interest than if it were sitting in the best paying savings account (they are accepting some extra risk though).
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