I’ve no doubt at all that peer to peer lending will increase, that some companies will be financed by it. However, it simply isn’t going to replace banking as the core method of financing with companies or any other significant part of the economy. For peer to peer lending does not do what banks do do: maturity transformation. This is such a basic point about banking that the economist Brad Delong uses it as the definition of a bank. If you borrow short and lend long then you are a bank. If you don’t you are not. And borrowing short and lending long is maturity transformation.