Folk2Folk

I. Company Profile and

was founded in 2013 and is headquartered in Launceston, Cornwall, Cornwall, England, and later expanded to the whole country. The platform is positioned as a "localized, trust-driven" financial docking bridge, connecting investors pursuing fixed income with small and micro enterprises in need of financing.

Its core philosophy is "good folks helping good folks", which promotes fairness, mutual aid, interest rate transparency, and community prosperity. Headquartered in rural and small towns in the UK, the company aims to actively promote regional development and economic growth.

2. Business model and product architectureThe

business model of Folk2Folk belongs to a typical P2P lending platform (also known as Marketplace Lending), and its main operation mode is as follows:

1. Businesses
   are primarily for SMEs or local merchants in need of working capital, typically starting from £100,000 and secured by land, commercial property or assets.

2. Investors
   include both natural and institutional investors, with a minimum contribution of £20,000 and a fixed return on investment (currently around 8.5–8.75%). The platform does not have a liquidity pool, and the structure is clear.

3. After the matching and capital flow
   platform reviews the borrowing project, the investor selects the project and contributes, and after the fundraising is completed, the funds are withdrawn from the investor and flow to the borrower, and the borrower pays the interest and principal on time. The platform earns an arrangement fee and an annual renewal fee.

4. Asset Security
   MechanismAll borrowings are pledged against the market value of the UK property, and Folk2Folk does not allow borrowers to use their homes as collateral. The platform only matches, and does not hold its own assets; At the same time, the funds are directly connected to the lender, and the risk is controllable.

5. Compliance Regulatory System
   companies are authorised by the FCA (Financial Conduct Authority) in the UK and are highly regulated markets; The business has been in business for many years and has maintained a record of zero loss so far, demonstrating strict risk control capabilities.

Through this model, the platform builds a trust ecosystem: borrowers get fast financing paths, investors get stable returns, and the platform takes into account the development of the local economy.

3. Scale and PerformanceSince

its establishment, Folk2Folk has achieved remarkable results in the small and medium-sized urban financial services market:

total amount of financing has exceeded £770 million, serving hundreds of enterprises, covering agriculture, tourism, real estate, energy and other industries.

Maintaining zero loss of investment principal for many years is a rare high security record in the industry.

Solid financial performance with revenue of approximately £5.9 million and net profit of approximately £1.8 million in the 2024/25 financial year, achieving the sixth consecutive year of profitability.

The platform ROI has a fixed interest rate of around 8.5% and is highly attractive due to the direct participation of investors in the project.

These financial figures reflect its competitiveness and robust operation in the P2P credit market.

4. Product and growth

pathFolk2Folk's product and business development includes:

1. Individual/institutional loan docking
   investors can choose to invest in a single project, and the fund reconciliation, repayment and income are transparent and open.

2. Asset custody and risk control process
   : Loans need to be mortgaged and approved by a third-party appraisal and filed by a lawyer to ensure the recoverability of the loan.

3. Platform extension services
   provide loan structuring advice, refinancing coordination and renewal possibilities. Provide strategic advice to borrowers to address future financing needs.

4. 
   In addition to retail investors, the platform has also actively introduced institutional capital, and as of 2021, several institutions have cooperated to expand the scale of financing.

5. The regional network is expanded to
   set up regional representatives, legal partners and local credit consultants, and cut into agriculture, tourism, town development and other project types in a scenario-based manner, so as to enhance exposure and financial sinking.

The strategic planning of the platform radiates from Cornwall to the whole country in the early stage, and in the future, it can enter more European regions or develop similar Chinese regions to replicate the successful model.

5. Competitive Advantage and DifferentiationFolk2Folk

has many characteristics and advantages in the P2P market:

Professional mortgage loans: with a real estate mortgage review mechanism, improve the risk control threshold and security;

Zero investment loss record: more than 10 years of high robustness has significantly improved the reputation of the platform;

Fixed high yield: 8.5%-8.75% Interest rates are more attractive than market interest rates;

Community trust network: generate synergy based on local communities;

High degree of compliance: FCA authorization and annual renewal fee model reflect compliance;

Sustained profitable operation: Demonstrate the ability to adapt to risk control and target markets.

The platform has become an important representative of innovation in rural financial services in the UK, with a clear competitive recognition among other lending methods.

6. Challenges and RisksAlthough

Folk2Folk has performed well, there are still challenges:

1. Fluctuations in risk
   interest rates in the economic cycle, downward trend in real estate prices, and recession in the country's economy may still increase the concentration of risks.

The

2. demand for collateral management is high
   , the cost of real estate risk control is high, and long-term monitoring of the evaluation mechanism and changes in collateral is required.

3. Regulatory policy uncertainty
   : There are changes in the FCA and the UK's financial regulatory policies, such as new regulations, which will cause pressure on fees and process adjustments.

4. Geographical Constraints and Growth
   BottlenecksAlthough the positioning of rural urban and rural small and medium-sized markets is clear, if the national expansion rate is qualitatively slow.

5. Lack of technology dependence
   : At present, the platform is mainly an intermediary matching model, and the technical system is relatively basic; In the future, it is necessary to strengthen digital capabilities and improve efficiency.

6. If there is a breach of contract under brand performance pressure
   , it will have a direct impact on the zero loss record, and it is necessary to carefully manage and communicate with the brand.

7. Development Strategy and Future PlanningIn

order to improve operational efficiency and market scale, Folk2Folk can focus on the following directions:

Loan standardization promotion: Promote loan asset securitization, Bringing in more institutional liquidity;

Technical system upgrades: development of Dashboard and mobile app to enhance the interactive experience of investors;

Fund and institutional linkage: set up impact funds, expand institutional investment, and improve the scale and stability of financing;

International expansion path: replicating its collateralized P2P model in similar markets in Europe;

Sorting out loan categories: expanding to multiple arbitrage structures such as equipment leasing, refinancing, and equity financing;

Community financial education and promotion: strengthen joint efforts with local governments and enterprises to popularize financial literacy;

Cooperation Ecosystem Building: Cooperate with local lawyers, brokers, and intermediaries to form a closed-loop model of regional cooperation.

8 Summary and reference valueFolk2Folk

is one of the successful representatives of the UK's township financial innovation model, with its stable operation and high security performance to establish a strong platform reputation; Stimulate the interest of investors through high yields and effectively connect with the needs of borrowers.

In the future, if it can maintain risk control standards, enhance technology-driven and replicate its regional success model, it is expected to become a model of P2P model in rural or small and medium-sized cities in Europe and even around the world.