Peer to Peer Lending is expected to grow 150% in 2013, and the portfolio of investors is growing in the industry. Investors can be broken down into individual investors and institutional investors. Individual investors are recognizing peer to peer lending organizations as a more profitable alternative to a traditional savings bank. Institutional investors are relatively new to peer to peer lending and can often lend through peer to peer organizations without traditional limitations.

Individual investors can invest on peer to peer lending platforms for several different reasons. As peer to peer lending grows, individual investors are able to use established lending platforms such as Lending Club and Prosper as an alternative to a traditional savings account. Prosper and Lending Club can offer individuals higher returns with often as little risk as putting money in a savings bank. Both Lending Club and British peer to peer organization Zopa, have described their individual investors as investing in a savings account.

The tremendous growth in peer to peer lending has attracted institutional investors.  Through peer to peer lending institutional investors are able to find investments that may not meet traditional standards or may fall just below traditional standards. Institutional lenders are also able to see how individual lenders respond to investments. There are several cases, in which institutional investors will watch an investment and once individuals have funded a certain percent of the investment the institutional investors will match the investment.

Peer to peer lending’s growth has lead to increased returns for individuals and expanding opportunities for institutions.