8 Alternative finance

The term ‘alternative finance’ is used to describe a way of raising business and consumer funding that does not involve a bank as an intermediary in the lending decision. It has developed in the past 15 years to bridge the funding gap for micro and small businesses, when traditional bank funding was difficult to obtain. It involves individuals coming together and pooling their funds so that larger amounts of money from the pool can be lent out to consumers and businesses. The most common of these are crowdfunding and peer-to-peer lending.