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There once was a time when building societies were regarded as the alternative to banks. These were mutual organisations - owned by their members - where savers could get a decent return. Over the last two decades, the number of building societies have fallen as some demutualised (became banks or were taken oven by banks). The financial crisis of provided an opportunity for peer-to-peer companies, as borrowers found access to capital harder to come by as banks tried to preserve capitol. As lots of cheap money became available to try to encourage banks to lend again, the rates on offer to savers fell still further.
Building societies are not what they once were, with a lot operating like banks in all but name. I recently received the annual statement from one such building society, which had made yet another annual loss, yet the CEO received more than 10% rise in remuneration from the previous year. It is no wonder that finance has become so unpopular with the general public.
Peer-to-peer lending does allow individuals to readdress the balance with borrowers getting a market leading interest rate, and lenders receiving a return greater than they can with their bank or building society - provided the understand the potential risks.