The wisdom (and money) of the crowds comes to Croydon


By - Wednesday 16th April, 2014

Ahead of tomorrow’s #Croydon #TechCity financial tech event, Paul Scully explains Croydon’s role in P2P lending’s history


Investment is key to every business, be it a start-up or a multinational. Yet sourcing and securing it remain key inhibiting factors for growth. Through the internet, crowd sourcing has quickly started to take shape as a possible solution. Websites like Kickstarter provide an answer for the problem of a bank refusing to take on all the risk for a new venture. It also provides a fantastic market testing tool. When you have to convince hundreds of investors rather than just one, it simultaneously becomes its own market research.

Photo provided by IAM. Used with permission.

Croydon has been at the forefront of the next stage of Peer to Peer (P2P) lending. Maturing beyond what some see as gimmick investments, the recent purchase of Green Dragon House used the largest P2P investment in the world, to the tune of £4 million, alongside private investors. The new owner of the building, Martin Skinner of Inspired Asset Management said that, “The scheme not only highlights the bright future of P2P lending as a conventional source of investment, but also the flexibility that it has when used alongside other methods of finance. The results have been so seamless that there has been no change in the process of asset procurement compared to my previous ventures despite the debt structure being so radically different.”

Banking is still struggling with both its reputation and capital reserves. P2P is quickly proving to be a creditable, alternative port of call when the banks won’t lend. The next question is, will it remain as a significant competitor for the long term?

The fact that Peer-to-Peer lending is becoming so popular, with Kickstarter alone recently passing $1 billion pledged, shows that the willingness to invest has always been present, but the opportunity was not. Now, with technology binding the world together like never before, people are able to find investors or projects instantly with the click of a button. By increasing the opportunities for investment, particularly at a time when the return on savings remains stubbornly low, the UK alone has pledged or invested over £54,000,000 just through Kickstarter.

With the Croydon regeneration firmly on the launchpad, there are significant opportunities for investors of any size. Projects like Green Dragon House are showing smaller investors that there may be a way for them to be a part of an exciting future.

Martin Skinner of Inspired Asset Management. Photo provided by Nudge Factory. Used with permission.

From start-ups to redevelopment projects, investment is the key. So while P2P lending is a global phenomenon, it doesn’t mean that local and interested parties cannot get involved. They just need the opportunity. Martin Skinner also noted that “Having experienced such a smooth transition into Peer to Peer lending, I would be extremely interested in doing it again. We’ve seen that a great deal more innovative businesses and property developments are being enabled through P2P or crowd-sourced funding at a time when the banks are being more cautious, so the increasing capital flows can regenerate not just Croydon but the country as well.”

So, as savings in the bank fail to even outpace inflation, it will be interesting to see if smaller investors see P2P as an opportunity or if banks will regain the momentum. With a global market at investors’ fingertips there is bound to be something that fits. But with Croydon being at the forefront of this new way of financing, investors may not even have to look that far.


Croydon Tech City – Thursday 17th April 7:30pm – Financial tech startup special

To attend this Thursday’s Croydon Tech City event at Matthews Yard, please sign up as ‘attending’ here or  to confirm your attendance.

Paul Scully

Paul Scully

Paul is a Partner at Nudge Factory, a Croydon-based communications agency specialising in CSR and community engagement. Nudge Factory works with a number of people and companies at the heart of the regeneration of Croydon town centre. Away from the day job, Paul is standing for Parliament at the next General Election for the Conservatives in Sutton & Cheam and blogs on Sutton matters at www.scully.org.uk.

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