Canadian p2p lending service CommunityLend announces:
MorWEB partners with CommunityLend Inc. to provide direct access to
unsecured lending options for the Canadian Mortgage Broker market
Marlborough Stirling Canada (MSC) is pleased to announce that direct access to CommunityLend, Canada’s only online Peer-to-Peer lending service, will now be available to the broker market using MorWEB.
MorWEB brokers will now be able to seamlessly refer clients directly to CommunityLend to arrange unsecured loans from private investors. This will provide another value added service to customers of mortgage brokers using MorWEB. Phase one of this novel integration is now available on the MorWEB platform with a more comprehensive integration scheduled for later this year.
CommunityLend, …, launched earlier this year and is exploring a number of different marketing options to spread the word about its services and to recruit good quality borrowers looking for more competitive rates for small unsecured loans.
”We are excited by the opportunity to work with one of Canada’s leading software providers to the Mortgage industry,” noted Michael Garrity, CEO of CommunityLend. “We understand the important role of Mortgage Brokers in helping their clients to find the best rates on loans to meet their needs. …”
Since CommunityLend is restricted to accredited investors* by regulation, this marketing move uses an existing multiplier to reach potential lenders. It continues the earlier reported trend of existing financial institutions partnering with new p2p lending players.
(Source: CommunityLend blog)
*corrected – an earlier version of the article wrongly stated “institutional lenders” – see comment below
Today CommunityLend launched it’s peer-to-peer lending service in Canada. The service currently is available to residents of Ontario. Borrowers can use CommunityLend as an alternative loan source to bank loans or credit cards with the ability to set the desired interest rate themselves (CommunityLend sets minimum rates). Loan amounts range from 1,000 to 25,000 CAN$ for a loan duration of 36 months. CommunityLend is open for borrowers with a good credit rating (AA to C), which encompasses about 70% of the population.
The borrower has the option to define whether there will be an auction (competitive bidding) once the loan amount is funded, possibly getting him the advantage that the interest rate will be lowered during the auction time with lenders underbidding each other.
Due to regulation restrictions only lenders qualifying as “accredited investors” are allowed to participate as lenders. The minimum investment is 100 CAN$. Bids can be in multiples of 100 CAN$.
CommunityLend provides lenders information about borrowers to help them make decisions about lending, including; the credit categorization of the borrowers on the site (credit rating) , their assessed debt burden ( affordability rating), their assessed stability (stability rating).
CommunityLend actively steers lenders towards diversification with the rule that a lender can only bid a maximum of 10% of the amount of an individual loan and the bid maybe not more than 10% of his total overall investment.
Registration to the service is free. Borrowers pay closing fees of 1 to 2.5% percent of the loan amount depending on credit grade (minimum 75 CAN$) upon payout of the loan. Lenders pay 1% p.a. fee on the outstanding loan principal.
CommunityLend uses credit bureau data and bank account data to verify borrower identity.
The following video gives an introduction to CommunityLend:
I like the cheerful style of the website. All information is presented in an easy to navigate and easy to understand way.
CommunityLend Holdings Inc., the parent company of Canadian p2p lending service CommunityLend Inc., announced a 1 million CAN$ investment through a convertible debenture from from Stone & Co. Limited Flagship Stock Fund Canada (“Stone”). As part of their investment, Mr. Richard Stone, Founder and CEO of Stone, will join CommunityLend’s Board in an observer role.
Michael Garrity, Co-Founder and CEO of CommunityLend Inc, said:
… When CommunityLend launches in the next few weeks, we intend to remove these obstacles through the introduction of Canada’s only peer-to-peer lending system, a new lending model which removes the middleman in lending transactions by allowing borrowers the ability to connect directly with lenders through a safe and secure online lending system. …
Microlending.ca reports that CommunityLend may be ready to launch soon as it cleared another registration hurdle. A legal document published at the Ontario Securities Commission site gives lots of details on CommunityLend’s p2p lending plans.
It also reveals that p2p lending in Canada will (at least initially) be restricted to accredited investors (high wealth individuals).
See Dan’s articleat Microlending.ca for a review of the document.
As the end of 2008 approaches here is a look back on the highlights of peer to peer lending news in 2008:
- February: Gartner predicts that by 2010 social lending captures 10% market share; p2p lending in Poland takes off; IOUcentral launches in Canada – only to be suspended by regulator a week later
- April: Lendingclub enters quiet period for SEC registration; Cashare launches p2p lending service in Switzerland; Prosper goes national with 36 percent max. interest rate – partnering with WebBank; Zopa UK reshapes markets – concentrates on 36 and 60 months loan terms
- May: MyC4 has new interface and shifts currency risks to lenders
- August: Zopa UK launches young market; Maneo launches p2p lending services in Japan
- September: Kiva repayments are now immediately available for reinvestment; Zopa grows in Italy – has secondary market
- October: Loanio launches in the US; Friendsclear launches in France; Smava raises more venture capital; Zopa US closes; Veecus launces p2p microfinance; Lending club comes out of quiet period and introduces secondary market note trading platform; Prosper enters quiet period for SEC registration; Kiva wins grant; more than 685M US$ p2p lending volume; two funds will invest more than 2M Euro in Africa through MyC4
- November: 50 million US$ Kiva loans reached; Comunitae gets funding; SEC orders Prosper to cease and desist; Loanio suspends operations
- December: Class action lawsuit and other legal troubles challenge Prosper