Watch the preview of the coming new Zopa TV advert. It will air starting next Monday on channels like Dave, More4, Sky Sports 2 and ITV4. There will be a second version emphasizing how Zopa is different from banks.
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P2P Lending Site Ratesetter Raises another 600k
UK p2p lending service Ratesetter has raised another 600,000 GBP from undisclosed existing and new investors. The total equity funding of the company now is 1.5 million GBP. The additional funding will be used for marketing purposes.
RateSetter co-founder and CEO Rhydian Lewis said: “We’re thrilled that RateSetter has earned the confidence of some well-respected investors. The response to RateSetter has been very positive and has exceeded our expectations. Our users enjoy the benefits of high returns on their savings and low cost, flexible borrowing.â€
P2P-Banking.com wrote an review on Ratesetter when they launched in October 2010 (RateSetter brings rolling monthly loans to p2p lending). Since then the company grew considerably reaching 2 million GBP lent by lenders in the first two month.
If you are a Ratesetter lender or borrower please do share your experiences and opinions. Write a review on Wiseclerk’s Ratesetter forum. Thank you.
Fairplace Faces Investigation by Federal Police
Fairplace, the first p2p lending service in Brazil, faces an investigation by the Federal Police (PolÃcia Federal). Launched in April Fairplace so far facilitated 2.5 million BRL (approx. 1.5 million US$) loans. Apparently the Central Bank requested an investigation as early as August 10th, claiming that Fairplace violates laws that prohibit companies that are not financial institutions to operate in financial markets.
In December then the Federal Public Ministry of St. Paul (Ministério Público Federal) asked the Federal Police to open an investigation. According to press coverage penalties for the possible violations range up to four years imprisonment.
Separate investigations are undertaken by the Brazil Securities Commission (Comissão de Valores Mobiliários (CVM)).
Founder Eldes Matiuzzo says his company does not provide loans but only offers a platform to match lenders and borrowers. He added that the company checked the legal situation before launching.
Nevertheless Fairplace suspended the auction of new loans on the site on Dec. 15th.
Gimmick – App for P2P Lenders
I just saw the first iPhone App that is to support lenders in using p2p lending services. It aims to help them keeping up to date with the latest listings at Prosper, Lending Club and Kiva.
The features of this app are rather basic, but with the number of people lending at p2p services there could be a market for a sophisticated app that really helps lenders select loans while on the move.
Update: There are in fact two other free apps to browse Kiva loan listings.
CommunityLend Starts FinanceIt – Offers Sales Financing Solutions for Businesses
Canadian P2P Lending company CommunityLend has launched new site: FinanceIt. FinanceIt allows Canadian businesses to provide their own in-house financing directly to their customers. Initially FinanceIt targets home improvement vendors, a line of business in which FinanceIt says Canadians finance 51 cents on every dollar spent.
Features of FinanceIt include:
- A complete lending platform, including ID verification, credit review, EFT, and collections
- Instant approvals that are valid for 90 days
- Automated legal documentation
- Works on iPad and other mobile devices
- Funds are deposited into our partner’s bank account
- No fees of any kind
This is a highly relevant development for p2p lending. If successful, CommunityLend will achieve four goals:
- Increase loan demand while at the same time cutting marketing expenses/efforts to reach potential borrowers
The promotion of the loan offers will be in fact done for free by the business that offers the financing for its goods - Build strong business relationships to vendors, which can be broadened should CommunityLend develop more p2p banking products aimed at businesses in the future
- Identify borrowers in person (at the store)
While I cannot judge how crucial this is in the Canadian market, it would be very useful in some other markets for p2p lending services to have - Validate the purpose the loan is taken out for
Usually in p2p lending unsecured loans can be used for any purpose the borrower wants. While some sites ask the borrower to describe the loan purpose in the listing this is never tracked or validated for it would be time-consuming and costly – just not worth the effort.
In a financing solution it is obvious what the loan will be used for. How is this information valuable? Communitylend will have very good data on how default rates differ depending on the loan purpose allowing them in mid-term to improve the pricing of the credit risk into the offered interest rate.
I believe this is a major step for p2p lending coming out of a single product niche (unsecured loans) into a broader p2p banking approach. And banks should watch out. Offering financing solutions to businesses is a core product for some banks.
P2P lending marketplaces in other countries should explore if offering loan financing to businesses is a viable route for them to grow too. In fact I know one p2p lending company that already has similar plans in the working and will start financing in 2011. Continue reading
Prosper Moves To Pre-Set Rates; Abandons Auction Model
P2P Lending site Prosper.com changed its business model today.
The company announced: ‘Our site has a new look, and we’ve eliminated the auction and simplified our loan process so that we can connect lenders and borrowers more efficiently. Borrowers will receive pre-set rates and lenders cannot be outbid. We hope you’ll appreciate this streamlined and even more prosperous experience.‘
Prosper is still lagging far behind competitor Lendingclub in monthly loan volume funded. While Prosper’s new loan funding process resembles the one of Lending Club more after Prosper did away with the auction it remains to be seen if it will help Prosper to regain market share.
The main problem of Prosper was not the auctions, but high default rates leading to lender churn.
Another change, according to a recent SEC filing, is that Prosper now allows partial funding of loans. Continue reading