International P2P Lending Volumes November 2016

The following table lists the loan originations of p2p lending marketplaces in November. This month I added Swaper. Funding Circle had a record month, for the first time crossing 100M GBP in new monthly volume, ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 438 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of marketplaces open to international investors. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Lending Statistic 11/2016

Table: P2P Lending Volumes in November 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Interview: Flender Pitches to Raise 500K

Flender is a UK startup (with background in Ireland) currently pitching to raise 500K GBP from the crowd.

Interview with Kristjan Koik, CEO of Flender

What is Flender about?

Flender is a peer to peer finance platform which helps businesses and consumers to borrow and lend money through their existing networks.

Businesses can leverage their customer base and strengthen loyalty; while friends become part of each other’s’ success. Flender does this while adding a new element of trust via social network connections.

Flender emphasizes the social relationships between borrowers and lenders. Don’t you think borrowers are hesitant to ask friends and connections for money?

The social lending market among friends, family and connections has never been formalized, which is crazy when you consider that this is a market worth over 3 billion EUR a year in Ireland and the UK based on independent research performed in September 2016.

Asking people that you know for money – and lending to them – is an awkward thing to do and is certainly an unreliable means of finance. Whether it’s to fund further study, grow a business or to fund home improvements, Flender will let you borrow from and lend to people with whom you have a connection much more easily.

For individuals, there is the satisfaction of helping others while earning more interest than a standard savings account while businesses can have access to funds faster and at the interest rate they prefer. Everyone wins.

P2P lending has evolved a lot over the past 10 years. Your model has a back to the roots touch to me. Do you see your model as a reinvention of the true spirit of p2p lending?

I believe p2p lending and the sharing economy is the future of finance.

We have all lent or borrowed money at some stage of our lives and will use some sort of finance in the future – be it mortgage, car leasing, credit card, deposit account or investments. Similarly, we all have people in our social circles and professional networks who have money to lend or are looking for finance. It makes no sense that rather than doing these transactions with people who you know and trust we would do these with complete strangers with whom we know little or nothing.

Flender is not trying to create a new marketplace. We are simply formalising existing massive social lending market and by providing a seamless user experience and having first- mover advantage we feel we can dominate this sector.

The pitch video

Flender positions itself as different to other p2p lending marketplaces. Yet you take these as benchmarks for valuations in an exit. Furthermore your expected margin is much higher than those of other UK p2p lending marketplaces. What is the reasoning behind this?

Yes, we are very different to other p2p platforms, but investors will initially want to benchmark against something with which they are familiar, hence our comparison to existing platforms. Continue reading

Former Lending Club CEO Founds Credify Finance

Renauld Laplance, former CEO of Lending Club plans to reenter the p2p lending space. According to corporate filings he set up Credify Finance Corp. Credify Finance hopes to launch in 2017. Credify Finance was registered in Delaware on May 31 according to state records. According to the Wall Street Journal Credify is being funded with Laplanche’s money and that of outside investors. The company’s office is in San Franciso. Recently Credify sought senior developers offering a base salary of 136K US$.

Breaking: Zopa will Launch a Bank

P2P lending marketplace Zopa, the first p2p lending platform, established in 2005, announced today that it will launch a bank in 2018, offering FSCS protected saving deposits. This will not replace the p2p lending product, which will continue to operate.

Zopa CEO Jaidev Jardana says “We launched in 2005 to create a richer life for everyone by making money simple and fair. We have lent over 1.8 billion GBP and inspired a 100 billion GBP global industry. We have built a profitable, scalable and viable business. Yet we’ve only just begun. We want to launch a next generation bank to drive greater choice for borrowers, savers and investors, which is good for consumers and good for the economy. We are uniquely placed to re-define customer expectations of what a bank should deliver in the 21st century. Over the last 11 years we have delivered great value to borrowers and investors whilst prudently managing credit risk. Combining our pioneering data and tech-led culture with an obsession with fairness and customer experience, we are best placed to shape the future of personal finance in the UK.”

An announcement sent via email to investors reads:

I wanted to write to you, on behalf of everyone at Zopa, to share some important news.

We launched Zopa in 2005 to create a richer life for everyone by making money simple and fair. Since then, we have lent over 1.8 billion GBP, inspired a 100 billion GBP global industry and helped our lenders earn over 75M GBP of interest. We have built a profitable, scalable and viable business. Yet we’ve only just begun.

We want to offer consumers even more choice, which is why, subject to regulatory approval, we are planning to launch a next generation bank to complement our existing peer-to-peer products.

We will continue to offer our peer-to-peer investment products.

Launching a bank, to sit alongside our existing peer-to-peer business, will allow us to create new and innovative savings and borrowing products. At launch, Zopa will offer FSCS protected deposit accounts to savers and overdraft alternatives to borrowers.

As an existing Zopa customer, we will give you the first opportunity to try out our new products. We will also actively welcome your input as we shape them.

The application process should take about 15-24 months, and we will keep you updated when we have news to share.

We believe we are uniquely placed to re-define what you should be able to expect from personal finance products in the 21st century.

Over the last 11 years, we have built an innovative, profitable and well-managed business. We have proven that we can deliver great value to borrowers and investors whilst prudently managing credit risk.

We know how to originate quality loans seamlessly online and meet our risk expectations. No new bank has that track record, and no incumbent bank has the digital expertise that we do.

We put our customers at the heart of all our decisions and obsess over how we can use technology to offer you simple, smart choices. We are looking forward to offering more products to even more people in the UK.

For now, thank you for investing through Zopa. I look forward to sharing this exciting journey towards the next generation banking we all deserve

Investly Unveils New Investor Dashboard Design

Invoice discounting marketplace Investly released a new version of the website today offering a redesigned investor interface. Investly allows investors to finance invoices sold by British and Estonian SMEs. Since the launch 11 months ago the number and volume of invoices financed has steadily increased. On the other hand rising investor demand pushed down the interest rates during the auctions to the minimum rate of 8% often during the past weeks.

New Investly Dashboard
New Investly dashboard. View of my portfolio page. Click to enlarge

At the moment I don’t have any overdue payments – however in the past some payments were delayed for a few days. None of the invoices financed on Investly have defaulted so far.

Overall the new interface is a nice improvement and offers a better overview than the old layout. But there is still room for improvement. I would have liked it, if the tables were sortable for example. Continue reading

Fundedbyme is now a recognized p2p lending operator in Malaysia

Scandinavia’s equity crowdfunding platform, Fundedbyme, today received recognition as one of six operators  for Peer-to-Peer crowdfunding by the Malaysian Securities Commission in the Asian region. This announcement positions Fundedbyme as the only European operator in the Asian region. The award was awarded to Fundedbyme Malaysia at the third annual SCxSC Digital Finance hosted by the Securities Commission Malaysia. Malaysian Minister of Finance, Najib Razak and SC chairman Ranjit Ajit Singh handed over the award to Fundedbyme Malaysia’s COO, Angelld Quah, and CEO Daniel Geottfert.

fundedbyme-malaysiaThe Asian region is seeing an explosion in peer-to-peer activity, particularly, and crowdfunding in general,” says Daniel Daboczy, CEO and co-founder of Fundedbyme. “Fundedbyme is strategically positioned as the bridge between Scandinavia and Asia as we early-on saw the trend of cross-border investments – in the first equity crowdfunding campaign from Malaysia,
Halal Speed Dating, we saw that 40% of investors came from Europe, which is very exciting for both Asian and European entrepreneurs,” Daboczy continues. The latest equity crowdfunding campaign from Malaysia currently on the platform, iTalent, has registered interest to join from investors in 73 different countries.

Photo: Malaysian Minister of Finance, Najib Razak and Second Finance Minister Johari Abdul Ghani handing over the award to Fundedbyme Malaysia’s COO, Angelld Quah (Source: Fundedbyme)

International P2P Lending Volumes October 2016

The following chart lists the loan originations of p2p lending marketplaces in October. Funding Circle had a record month ahead of Zopa and Ratesetter. Lendinvest has strong results too and Assetz Capital makes a big leap forward. The total volume for the reported marketplaces adds up to 443 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. Thincats crossed the 200M GBP funded this inception milestone.

Investors living in national markets with no or limited selection of local p2p lending services can check this list of marketplaces open to international investors. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Loan volume October 2016
Table: P2P Lending Volumes in October 2016. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Interview with Ivan Pellegrini, CEO of Borsadelcredito

Ivan Pellegrini is co-founder & Group CEO at Borsadelcredito.it.

What is BorsadelCredito.it about?

BorsadelCredito.it is the first Italian p2p lending platform. We help creditworthy SMEs to obtain credit in just three working days while promising 5-7% return to our investors. So far, we disbursed loans for 4.3M EUR (as reported on our statistics page) boosting the savings of hundreds of lenders.

In a market context where about five million SME’s are facing strong difficulties in approaching traditional credit channels, P2P lending represents a breath of fresh air for both investors and entrepreneurs.

What are the three main advantages for investors?

For investors, accessing a digital marketplace represents an unprecedented way to obtain strong returns while supporting Italian SME’s. Overall, expected average returns range from 5 to 7% and, thanks to a strong diversification level (funds are divided among hundreds of firms) the risk of losses arising from defaults is strongly contained.

With BorsadelCredito.it our lenders invest in the Real Economy. The digital marketplace is the most efficient and attractive way for credit operations in the Italian enterprise framework: loan fund and SMEs financing opportunities represent one of the easiest investment options in the whole market.

What are the three main advantages for borrowers?

For the applying companies, forwarding a request is very easy: as for the lender, the experience is completely digital and way faster than the traditional credit channels. From BorsadelCredito.it it takes only 5 minutes to complete a loan request: in order to be evaluated, firms must have at least one year of activity, 50.000 EUR stream of gross revenue and no sign of adverse events from Credit Bureaus.

Funding requests are handled by our neuronal algorithms in a few hours and then forwarded to an experienced team of credit analysts, who overlook the firm’s statements and overall performance in 24 hours to send a final response: if the evaluation is positive, credit can be disbursed in just two working days, without the need to open a bank account or provide any guarantees.

Ivan Pellegrini, BorsadelcreditoWhat ROI can investors expect?

The ROI our investors can expect is very high and it’s around 5/7%.

Currently the average is 5.71% after bad debts and fees, much higher than what they would earn with the other traditional tools for investments. Last but not least we have a credit protection for our investors payed directly by borrowers.

Is the technical platform self-developed?

Yes, the platform is completely self-developed, as for our valuation models. We invest most of our resources (both in terms of time and money) in the development of efficient processes, workflows and credit scoring models (for example, we are now building a more complex Web-scoring model, which uses big data from the internet to give us a clear overview on how the web sees the evaluated company). Continue reading

Zopa Runs Hackathon

Zopa is the first p2p lending marketplace to run a hackathon called Zopathon. Participants a challenged to code something ‘that makes interest rates more interesting’. I have seen several hackathons in the fintech space but usually they are organized by banks, service providers or accelerators and none were p2p lending specific. Zopa says they will introduce APIs, that can be used in the 24 hour event. Sign up for participants is here.

zopathan

Lending Club Launches Auto Refinance Loans

Today Lending Club has unveiled a new product offer. Borrowers in California will be able to refinance auto loans through Lending Club. Lending Club says that the opportunity is huge with currently more than 1 trillion US$ in auto debt outstanding, while just a fraction of that – 40 billion US$ – refinanced annually. The company states this represents huge potential for both Lending Club’s platform and the millions of Americans who could save by refinancing into a more affordable product. Lending Club estimates the average APR for borrowers on new loans through Lending Club will be about 1-3% lower than their current loan, translating into an average savings of up to 1,350 US$ over the life of the loan.

“Tens of millions of Americans borrow over half a trillion dollars every year to buy cars. The practices and processes of the auto lending industry offer consumers limited options and a lack of transparency. This has created a gap between the rates consumers pay and the rates they might otherwise qualify for, unnecessarily driving up debt burdens,” said Scott Sanborn, Lending Club’s President and Chief Executive Officer.  “We are excited to leverage our technology and core capabilities to put thousands of dollars back in consumers’ pockets.”. “This is Lending Club’s first offering of access to a secured loan with an overall risk and return profile that’s complementary to the unsecured loans available through our platform. It’s a big step in the evolution of our platform, a win for consumers, and will give our investors access to another proven asset,” Sanborn said.

Loans will be for amounts from 5K to 50K US$ with terms of 24 to 72 months and APRs ranging from 2.49% to 19.99%.

Lending Club strives to offer a much simpler application process than competitors. While the loans are initially limited to borrowers in California it seems likely that Lending Club will expand that. An article with more details is on Lendacademy.

lendingclub-auto-loan