Online peer-to-peer lender eyes LSE listing A London-based financial group is aiming to become the first listed company to lend money through online peer-to-peer platforms, and compete with mainstream banks in the UK and US. Exchange Associates has revealed plans to raise £200m over the next few months to provide capital to a number of peer-to-peer websites in the two countries, before being floated on the London Stock Exchange by Liberum Capital, the boutique investment bank. Robert Burgess, chief executive of Exchange Associates and former chief executive of Alliance Trust Savings, said the company was targeting a late October share offering. As well as providing wholesale money for lending, it also plans to invest directly in online lending platforms. "There is significant interest in this sector," Mr Burgess said. The timing is right, the platforms are established and there is government support . . . it seems fairly obvious that disintermediation has spread across the high street and is now going to affect banks. What should be their core activity has not evolved to meet the digital age. Peer-to-peer lending platforms such as Zopa in the UK and Lending Club in the US match lenders and borrowers directly, bypassing banks in the same way that eBay bypasses traditional high-street retailers. They have benefited from both low interest rates and banks" reluctance to lend in the wake of the financial crisis - as savers have been willing to take more risk in the search for returns, and borrowers have to look for alternative sources of funding. Since the first peer-to-peer lending platform was launched in 2005, the sector is estimated to have provided more than $4bn (£2.5bn) in loans. In the US, where peer-to-peer lending is regulated, banks and hedge funds already invest money through the sites and the industry has won high-profile endorsements from Google and Morgan Stanley. Lending Club chief executive Renaud Laplanche told reporters last December that he expected the company to be ready for an initial public offering within two years. However, the UK market is not due to become regulated until April 2014 and is still dominated by retail investors. Interest rates on offer also tend to be lower than those available in the US, where many borrowers are consolidating credit card debts. UK based Zopa, for example, advertises a 4.8 per cent annual return for investors. In the US, Lending Club provides returns of up to 23.4 per cent if investors choose to lend to its riskiest group of borrowers. Samir Desai, co-founder of peer-to-business platform Funding Circle, said institutional money will be crucial if the sector is to keep growing in the UK. Funding Circle is already in discussions with Santander UK about ways in which the mainstream banking sector can work with peer-to-peer lenders. One proposal is that Santander business customers whose borrowing needs cannot be fully met by the bank could be passed on to Funding Circle.