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If the current sub-prime lending crisis in the US and the UK proves anything, it’s that even traditional lenders can act irresponsibly, despite the myriad government regulations designed to hold them in check. That sobering fact, together with the tightening liquidity and a possible upcoming recession, should give a boost to so-called peer-to-peer lending. For the uninitiated, P2P lending websites directly match borrowers seeking relatively small amounts of cash with private individuals willing to lend them the money. Borrowers post their needs, lenders make offers and everyone benefits from bypassing lending’s traditional middlemen who package loans for a fee. We first looked at P2P lending nearly three years ago when we profiled Zopa, a UK start-up which we described as “like eBay for money”. Since then we’ve covered other fast-growing P2P start-ups in the US, the Netherlands, Germany and China. And last week, Fynanz, which focuses solely on loans to students. The latest entrant on our radar screen is Fosik, which brings P2P lending to Australia. Like its counterparts elsewhere, Fosik touts the benefits of using the site’s tools as a way to formalize lending arrangements among family members and friends. Plus, the site notes that investors—whether they know the people they’re lending to or not—can benefit from returns that reach 10 percent or higher. Meanwhile, signs abound that the P2P lending is rapidly maturing. Prosper is seeking to create a secondary market around its loan portfolios. This would allow lenders to get quick cash by selling their loan portfolios to other investors. Is it too late for entrepreneurs to get into the P2P lending space? Probably not. Whether launching in new markets, targeting specific audiences or offering different types of financial services, there’s still plenty of room for peer-to-peer banking to grow. Spotted by: Tom Flaherty