New figures from the Peer-to-Peer Finance Association (P2PFA) reveal that UK peer-to-peer (P2P) lenders lent over £2.2bn in 2015 as the P2P sector of the alternative finance market doubled in size.

The number of borrowers soared by 96 per cent to 273,000, while the number of P2P lenders leapt by 22 per cent to 128,000. The total amount lent through crowd financing to date now stands at £4.4bn.

The strong year-on-year growth of P2P lender platforms is impacting significantly on a range of markets, P2PFA chair Christine Farnish commented, adding:

“The growth demonstrates that more lenders and borrowers believe our industry to be a real alternative to traditional lenders. This is only enhanced by our members’ approach to transparency and strict business conduct rules.”

Farnish went on to say that the P2P finance industry was looking forward to the launch of the Innovative Finance ISA (IFISA) in April, which will make investors using P2P platforms eligible for tax-free interest. The initiative was announced in the July 2015 Budget by Chancellor George Osborne, who declared that he wanted to encourage a fast-growing industry by offering an innovative challenge to traditional finance institutions.

According to City A.M., some pundits are forecasting that P2P lending could hit over £6.6bn this year if the market continues to grow at the same pace. Small businesses appear especially interested in the platforms, as 40 per cent have had their first applications to traditional banks rejected. Net lending to SMEs by P2P firms climbed by 7 per cent to £96m in the final quarter of 2015 in comparison to the previous quarter.