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UK economy: How does peer-to-peer lending work?

12 November 2012 Last updated at 09:10 GMT

In the economic crisis, small businesses unable to lend from banks have been finding new ways to borrow money.

Peer-to-peer lending allows companies to gain investment from people directly via an online marketplace.

Steph McGovern reports from Lancashire, where the council is set to become the first local authority to invest in such a scheme.