UK

P2P Lending Service Lending Works Launches

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P2P lending service Lending Works launched today. The service says its unique selling proposition is that it offers lenders actual insurance and thereby more protection than the provision funds scheme major UK competitors like Zopa and Ratesetter do offer. Reading the fine print, there is insurance, but capped at 10% bad debt, which should be sufficient in the current market situation: ‘The Lending Works Shield provides cover of up to 10% of all Lending Works loans and so provides a market leading 17 times cover‘ [compared to a stated 0.58% industry wide personal loan borrower default rate]. Lending Works is open to UK residents with a UK bank account.

I also noted that Lending Works allows lenders the option to exit their investment prior to the loan duration if they accept a fee of 0.6% (or 20 GBP) whichever is greater.

Available loan terms range from 1 to 5 years.

Lending Works says it has raised 3.5 million GBP prior to launch.

Zopa Promotional Offer: Rate Promise

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Today Zopa announced yet another promotional offer for lenders: Rate Promise. In this limited time offer Zopa promises lenders that ‘… the money you lend within the Offer Period, for up to 5 years, will earn an average return of 5% over the lifetime of those loans.‘ That is after fees. The offer is valid from January 9th till Feb. 3rd. Actually for some lenders this will mean even higher guaranteed returns – see full T&C of the Rate Promise here.

I think Zopa’s repeated promotional offers (cash backs and now rate promise) are signals that Zopa feels the impact of the p2p lending competition which entice Zopa’s customers with models that seem more appealing (there has been a lot of discussion that with the introduction of Safeguard Zopa became much less transparent) or could yield higher returns. In terms of p2p lending loan volume originated per month the main competitors are certainly gaining ground on Zopa.

While this is a (nearly) no risk offer for those lenders managaing to invest during the promotion duration, users on the Zopa Talk board do wonder what longtime impact this has for Zopa. And rightly so as Zopa will have to cover any shortcomings from its fee margin. Done repeatedly it will effectively result in an unlisted fee decrease.

I am sure it will fulfill the probable short term goal: increase funds on offer and originations in January.

International P2P Lending Services – Loan Volumes December 2013

wiseclerk 1 Comment

December was a month with mixed developments. While the US services and selected other services continued to grow, other services – especially the UK ones – had a slow month with decreasing volume. Of course this is influenced by the Christmas holidays. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.

Table: P2P Lending Volumes in December 2013. Source: own research
Note that volumes have been converted from local currency to US$ for the sake of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed:
If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.

This month I added 3 more UK services to the table and removed Squirrl, Continue reading →

P2P Lending Services – Loan Volumes November 2013

wiseclerk 1 Comment

P2P lending volumes grew further in November. Prosper points out that the slight decline was to be expected due to less origination days in this month. Looks like Funding Circle and Ratesetter are catching up on Zopa in Britain. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services. Next month I expect to add figures for two more services to the table.

Table: P2P Lending Volumes in November 2013. Source: own research
Note that volumes have been converted from local currency to US$ for the sake of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed:
If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.

P2P Lending Services – Loan Volumes October 2013

wiseclerk

P2P lending volumes grew strongly in October. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.

Table: P2P Lending Volumes in October 2013. Source: own research
Note that volumes have been converted from local currency to US$ for the sake of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed:
If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.

Funding Circle Raises 37M US$ – Will Merge With Endurance Lending Network

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UK p2p lending service Funding Circle which facilitates loans to businesses has raised 37 million US$. Funding Circle, launched in 2010, has raised a total of 58 million US$ venture capital now. The series C funding round was led by new investor Accel Partners, with participation from Ribbit Capital (another new investor) and Union Square Ventures and Index Ventures.

Funding Circle also announced that it will merge with smaller US service Endurance Lending Network. Launched in 2011, the Endurance Lending Network has carved out a niche working with fast food joint franchisees but is not releasing its loan volumes, although they are understood to be considerably lower than Funding Circle’s. Funding Circle says that, combined with its back-end technology platform, Endurance’s established team of around 15 employees with experience of the US market will help it crack America.  The entire Endurance team will stay on at the firm, which will re-brand as Funding Circle as it targets what the Small Business Administration estimates is a $100 billion funding shortfall in the US economy.

In the US, the model will be modified says Samir Desai, CEO of unding Circle: lending will only be open to accredited investors. This is partly because of regulatory issues.

This is a very big step as it is the first merger of large p2p lending service and at the same time the first international merger. Funding Circle will be able to target a huge market.

Source: press release (via Techcrunch, Venturebeat)