The main specificity of the French banking landscape is the important credit union culture. France has a strong history in cooperative banking, which gave birth to today’s important French banks as Credit Mutuel for example.
Will this history have an impact on the P2P lending development in France?
It’s interesting to notice, that the first P2P lending service in France, FriendsClear, just inked a partnership with one of these cooperative banks: Credit Agricole, a former farmer cooperative which evolved into one of the main modern global banking players.
At the end of this year, thanks to this partnership and the bank license, FriendsClearwill be able to open a genuine crowdfunding P2P service for very small businesses. I will come back in a later post on the details of this partnership and how the service will be provided; I just wanted to underline the specificity of the French Banking landscape and the credit union culture for P2P lending.
For FriendsClear’s Founder, Jean-Christophe Capelli, it makes no doubt that it has a strong positive impact. “I see a very bright future for P2P lending around the world, but especially in France, where we have a cooperative banking culture” he declares, and French banks seem intrigued even interested in this new practice. “It reminds them of their origin, when farmers got together to help one of them buy a plough or a youngster to settle. With P2P lending we are in very similar model, which has probably been neglected over time. It reminds them of their values of solidarity.”
Thus, about the actual #bankbloggerfight between James Gardner and Chris Skinner to know whether P2P lending is disruptive for the banking industry, Jean-Christophe sees it very differently in France: “it is reflecting their own image, where they have arrived, and whether they are still relying on their founding values. In this case, the disruption will much more be on the image they want to send out, on their marketing, and further on their DNA.”
Having contacted several French banks to build this partnership, Jean-Christophe noticed a strong interest in P2P lending: “the innovation manager of a big bank, showed me the strategic road map for 2012 and they targeted a strong presence in P2P lending”.
FriendsClear doesn’t fear competition, though, quite the contrary, they’re looking for it: “the most important part in our business today, is to spread the word. You don’t wake up in the morning, thinking, I’m going to take a P2P credit. The way to approach finance should evolve, and we need to get away from the idea that the best way to manage money is to take a revolving card. If there were a couple of other serious P2P services, we could reach a far more important part of the French population and let the usage evolve more quickly”.
For the moment, the only competitors to FriendsClear would be banks. But they are actually not targeting the same population, and that is probably why banks will want to get into P2P lending to access this new fringe of the market: “if the Credit Agricole has been so keen on working with us, it’s because they realized that, with their current offer, the very small businesses were not addressed. With P2P lending, they see a way of enlarging their offer to this population.”
Even if France is very late in providing a genuine P2P service, the specificity of the French culture could accelerate the market penetration.