High rates mean higher risks

In the wake of the financial crisis in 2008, credit was hard to get for many businesses as banks rebuilt their devastated balance sheets. Meanwhile, as interest rates hit rock bottom, investors found that getting a decent return from traditional savings products proved difficult. As a result, a whole new financial sector sprang up, known as peer-to-peer lending (P2P). Investors could put their money into platforms such as Zopa and RateSetter, which would lend it out to businesses and individuals looking for finance. Savers got a better