Zopa has announced that it reached the milestone of 150 million GBP in loans facilitated. Zopa says the new loan volume per month accounts for between 1% and 2% of new personal loan volume made in the UK.
P2P lending service Lending Club announced yesterday that it has been selected as a World Economic Forum 2012 Technology Pioneer. Lending Club was selected from amongst hundreds of applicants from around the world that hold the promise of significantly impacting the way business and society operate.
The members say that the new UK trade body is set up primarily to ensure the growing sector maintains high minimum standards of protection for consumers and small business customers, as it brings much-needed new competition and innovation to the banking market. In Britain this year, peer-to-peer finance will account for more than £100 million of loans to individuals and small businesses. As new financial regulatory structures are put in place by the Government over the next 18 months or more, the Peer-to-Peer Finance Association will also work hard to ensure that the new rules will include effective regulation for the peer-to-peer finance market.
The association is open to other peer-to-peer providers subject to meeting the required standards. The Association has established a wide definition of peer-to-peer finance providers as: ‘platforms that facilitate funding via direct, one-to-one contracts between a single recipient and multiple providers of funds, where the majority of providers and borrowers are consumers or small businesses. Generally, funding is in the form of a simple loan, but other instruments may evolve over time.’
The Association’s Rules and Operating Principles set out the key requirements for the transparent, fair, robust and orderly operation of peer-to-peer finance platforms and cover: 1. Senior management systems and controls; 2. Minimum capital requirements; 3. Segregation of participants’ funds; 4. Clear rules governing use of the platform, consistent with these Operating Principles; 5. Marketing and customer communications that are clear, fair and not misleading; 6. Secure and reliable IT systems; 7. Fair complaints handling; and 8. The orderly administration of contracts in the event a platform ceases to operate.
Rhydian Lewis, CEO of RateSetter, said: “The message we want to send to the wider world is that Peer to Peer is working: Lenders across a number of sites are getting market beating returns on their savings, Borrowers are getting lower cost loans, and increasingly P2P finance is becoming more established in the mainstream. As an industry, we would all encourage clearer regulation of P2P finance (not least because it would address the perception that P2P is somehow not regulated). The Association will give us a platform with which to lobby for P2P to be considered on an equal footing with other financial services.â€
On the peer-to-peer equity market Crowdcube (see earlier coverage) the first business succeeded in raising the desired funding in exchange for equity. Yesterday bodycare business Bubble & Balm hit its funding target of 75,000 GBP. The amount was funded by 82 investors which will in return receive 15% of the equity of the company.
I am one of those, albeit with a symbolic amount of 20 GBP invested, which means that in the future I will own a whooping 0,004% (=1/25000) of Bubble & Balm, once the transaction is legally finalized.
Investing so far was very easy – I contributed my 20 GBP (plus fees) via Paypal. There is the option to pay via bank transfer too. After uploading the money to the account I then selected the business to invest to.
For the moment it is fun to participate in this first public p2p equity process in the UK and I see it as an experiment with the ability to gain first hand experience how it proceeds.
I selected Bubble & Balm as an “investment target” for three reasons:
It was clear that this pitch would be the first to fully fund
It is an established business that already operates since 2009, not a startup with a mere idea
The information provided in the pitch is sound (business plan, financials, background of founder)
The bodycare business will use the investment to expand its award-winning product range, increase marketing activity and to meet increasing demand from retailers such as Waitrose, Oxfam, Planet Organic and a growing number of independents.
Recently Zopa UK removed the ‘Listings’ functionality that allowed borrowers to list individual loans. Listings were introduced in October 2007 as a add-on to the original Zopa markets model.
Here is the official announcement of Zopa regarding the removal of the Listings function:
You might know that Zopa is a little unusual amongst the now 30+ peer-to-peer lending companies running worldwide in that we facilitate the vast majority of loans through the Zopa Markets; almost all the other peer-to-peer lenders make all their loans using something more like our Listings. Indeed, we weren’t first-to-market with the Listings approach, adding them to our site about two and a half years after we first launched. Since then some 700 Zopa borrowers have received loans totaling £4.3m using Zopa Listings and there’s been some great ones in there; from guitar re-stringing, to a planetarium, a few bits of plastic surgery and of course plenty of cars.
Sadly though, while those figures sound quite good, they only represent a very small proportion of total Zopa lending and that proportion is declining too, while the rest of our business is growing rapidly. Couple that with Listings being much more long-winded to underwrite and we hope you’ll understand why we’ve taken the tough decision to draw Zopa Listings to a close.
… we’ll remove the functionality from the site that allows borrowers to create a new Listing. All the Listings that are already live before this point will of course be allowed to continue to their natural conclusion and once they’re all finalized, we’ll remove all references to Listings from the site.
If you’ve taken part in any lending via Listings, you’ll still be able to keep track of them and monitor how they’re being repaid in My Loan Book, where you can now find a link to your borrower’s original Listing page in the detail page of the loan in My Loan Book (click on the borrower’s username to open this view).
British Fundingcircle.com has announced the closing of £2.5m of Series A financing from Index Ventures, co-investors and existing shareholders.
Since Funding Circle launched in August 2010, more than 4,000 businesses and savers have signed up, with 11.5 million GBP offered to businesses to date. Currently, lenders have collectively earned 120,000 GBP in interest with average yields of 8.3% with access to their funds through Funding Circle’s secondary market. fee from lenders and 2% fee from borrowers. Yield is calculated before fees, tax deductions and bad debt. To date, no businesses have defaulted on loans and therefore no bad debt has been incurred by any lender.
Samir Desai, co-founder of Funding Circle, said: “We are delighted to welcome such a prominent and well respected investor as Index Ventures as a shareholder in Funding Circle.â€
CARE International UK runs the p2p microfinance platform Lendwithcare.org. For a minimum investment of 15 GBP anybody can help funding a loan to entrepreneurs in Africa or Asia.
Lendwithcare has partnered with local MFIs in Benin, Togo, Philippines, Cambodia and Indonesia that disburse the loan to the borrower. Lenders do not receive interest. Aside from the default risk (Lendwithcare claims less than 2% bad debt) lenders also bear the currency exchange rate risk. Lenders do fill their account via Paypal or credit card, withdrawels are through Paypal.
Though the concept closely resembles Kiva’s, it is interesting to see the approach used by a long-time established aid and development organisation. The site shows the experience CARE has with marketing and fundraising. It looks much more flashy (at least compared to the old Kiva page).
Lendwithcare was launched in April 2010. Since then 243 loans were funded. At the moment there are about 32 loan request by entrepreneurs listed.
