Starting April 2014 p2p lending in the UK shall become a regulated activity. There are no further details yet, the Treasury said the aim of the coming consultations was to get the details right. The leading British p2p lending marketplaces Zopa, Ratesetter and Fundingcircle welcome the prospect of regulation.
Sources: Financial Times, Ratesetter Blog.
British p2c lending Fundingknight, a service facilitating p2p loans to British companies, yesterday launched auction bidding. Basic requirements for companies to be eligible to submit a loan application are:
Fundingknight then uses the following criteria to decide if the application will be listed on the marketplace
Fundingknight launched in September 2012. There is no data publicly available on the loan volume to date.
French p2p lending service Prêt d’Union is very satisfied with the results of its first year’s operations, saying it funded a loan volume of 10 million Euro (approx 12.8M US$). Currently the loan volume is growing at approx. 2 million Euro per month.
In October Prêt d’Union raised the maximum loan amount from 19,500 to 30,000 Euro and introduced 2 year loan terms (adding to the existing 3, 4 and 5 year loans).
According to a study cited by Prêt d’Union 38% of the popluation in France have heard of p2p lending and when asked 20% said they would be willing to use a p2p lending service.
(Source: Company management)
‘The Lending Club Story‘ is the new Kindle ebook written by Peter Renton. It covers the interesting development of Lending Club from a p2p lending startup to a company that has issued 1 billion US$ p2p loans. The process is explained for new lenders and borrowers and the story of selected borrowers and lenders is shared.
Best of all: You can download it free for the next four days at Amazon.com and Amazon.co.uk.
Peter Renton writes the very informative blog LendAcademy where he shares advice for Prosper and Lending Club lenders.
Recently, p2p lending service Isepankur opened to international lenders. Residents from any European Union country and Switzerland can now sign up and start investing. There are no fees for lenders. I wanted to gain first hand experience as soon as possible so I signed up immediately and now share the process.
Getting started – Registration
Registration takes place completely online. First click on ‘Join for free’ and choose a username and a password. Isepankur now sends an verification email. After confirming that, there is a form where the personal details are entered. Also choose between confirming bids via password or mobile ID.
Depositing funds
Depositing funds is done via SEPA bank transfer. For transfers done in Euro this does cost the same bank fee as a domestic bank transfer – in my case it was free. I transferred 1,000 Euro in and the amount was credited to my account the next day.
Before investing is possible, Isepankur needs to confirm the identity of the lender. That was completed the same day the money arrived, and I was ready to start investing.
First investment
Isepankur uses an auction model, where individual p2p loan applications are listed. Lenders can either manually bid or use investment profiles for automatic bidding. Under ‘Invest’, ‘Investment Opportunities’ is the list of open loan auction. There are two different types: those that close immediately once 100% funded and those that continue to run until the auction time ends with investors underbidding each other’s interest rates once 100% funding is reached.
By clicking on a loan listing, the detail information can be reviewed. Isepankur only allows fully employed borrowers on the marketplace and checks their income and credit history.
Sample of the detail information on the loan application. Lists age, type of employment, length of employment, education level and home ownership.
Sample of the detail information on the loan application. The borrower has an income of 775 Euro and existing liabilities of 165 Euro per month. Continue reading
The Estonian p2p lending service Isepankur recently opened up to international lenders. Anyone with a bank account in the European Union or Switzerland can now start lending at Isepankur. Borrowing is still restricted to residents and businesses in Estonia (due to regulation reasons). I expected cross-border lending to be happening in peer to peer lending as early as 2008 (see my predictions). As it turned out it took 4 more years since my blog post for cross border lending to happen.
Isepankur is in operation since 2009 and has a good performance track record since.
Screenshot from the statistics section. The realised returns (after bad debt) show that most of those investors, who lent more than 5,000 Euro, fall into the range of 10 to 20% p.a.
Advantages and disadvantages for (international) lenders:
Advantages and disadvantages for borrowers:
I will publish an in depth review article showing step by step how I tested investing at Isepankur. Look out for this article containing screenshots showing the features and interface in the next days on this blog.