*This article comes from a presentation made at the Co-op Money NZ Forum 2016 on Saturday, April 30.

By Gareth Vaughan

At first blush peer-to-peer lenders on the one hand, and credit unions, building societies and mutuals on the other hand, seem miles apart. But maybe they are closer than you might think.

KPMG made this point in this year’s Financial Institutions Performance Survey.

“P2P lending is not new,” the auditing and financial services firm said.

“In many ways credit unions, building societies and mutuals were similar. People from a similar community, company or workforce who had money, would invest it to allow those from the same community, company or workforce to borrow. The theory was those investing would earn a slightly better rate than the banks could offer and those borrowing would borrow at a slightly more favourable rate and the holistic societal view would ensure that there was performance across the board and credit issues were minimised. All involved had the common bond of the community, company or workforce.”

“In some ways a P2P lender is the modern version of those older entities with more technology, more immediacy. But just like the credit union, building society or mutual when they launched, the P2P lender offers a different platform.”

So what is P2P lending?

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