What is Pret dâ€™Union about?
PRÃŠT Dâ€™UNION is the first and sole peer-to-peer lending platform accredited by the French Central Bank.
Thanks to an innovative disintermediation model, PRÃŠT Dâ€™UNION enables private individuals and institutional investors to lend money to borrowers directly through a secured bond marketplace, offering above-market returns on savings and low interest rates on consumer loans. Each party gets a better deal, bypassing mainstream financial institutions.
PRÃŠT Dâ€™UNION was founded in October 2009. In March 2011 the company obtained a broker license from the AMF (AutoritÃ© des MarchÃ©s Financiers â€“ SEC equivalent); in July 2011 the company obtained a credit institution license from the French Central Bank. The marketing campaign has been launched in January 2012.
In 26 months the company has issued over â‚¬80 million in loans (â‚¬11 million in 2012, â‚¬43 million in 2013). For 2014, Pret dâ€™Union plans to issue over â‚¬90 million in new loans.
Since its inception, PRÃŠT Dâ€™UNION has raised â‚¬18 million in equity. PRÃŠT Dâ€™UNION also enjoys the benefits of the French Research Tax Credit (CIR).
What are the three main advantages for lenders?
Pret dâ€™Union propose 4 types of investment products:
-Â Fund #1 (Conservateur Court â€“ Conservative & short duration) which invests in consumer credit with initial maturities of 2 years and 3 years granted to A Borrowers.
-Â Fund #2 (Conservateur Long â€“ Conservative & long duration) which invests in consumer credit with initial maturities of 4 years and 5 years granted to A Borrowers.
-Â Fund #3 (EquilibrÃ© Court â€“ Balanced & short duration) which invests in consumer credit with initial maturities of 2 years and 3 years granted to B Borrowers.
-Â Fund #4 (EquilibrÃ© Long â€“ Balanced & long duration) which invests in consumer credit with initial maturities of 4 years and 5 years granted to B Borrowers.
The format of our funds is pretty similar to LC Advisorsâ€™ funds. However we added a few features: an ISIN code (FR0011605690 for Fund #2) and weekly quotes on Bloomberg (ticker PDUALNG:FP).
Yields for Lenders range from 4.4% p.a. to 7.4% p.a.
Chart 1: Purpose of loans (PU Conservateur Court)
What are the three main advantages for borrowers?
For Borrowers, the three main advantages are:
-Â better rates,
-Â fixed interest rates and constant monthly repayments (no revolving loans),
-Â A quicker process.
Which marketing channels do you use to attract lenders and borrowers? Can you share the current CPA?
To attract borrowers we mainly use: emailing, aggregators, banners, affiliates â€¦ (CPA below 200â‚¬ per borrower).
To attract Lenders, itâ€™s mainly â€œword of mouthâ€ and PR.
What was the greatest challenge for Pret dâ€™Union in the past 12 months?
The greatest challenge in the past 12 months was to maintain an equilibrium between borrowers and lenders and to hire/structure a stellar team.
Chart 2: Regional distribution of loans (PU Conservateur Court)
Are there institutional investors lending at Pret dâ€™Union? What role do you see them having on your platform in the future?
We do have a few small institutional investors lending at Pret dâ€™Union â€“ but as of today most of our lenders are retail investors (qualified investors), HNWI, Family Offices, Private Banks, Foundations, etc.
We target the following breakdown:
-Â Â Â Â Â Â Â Â Â 1/3: retail investors
-Â Â Â Â Â Â Â Â Â 1/3: HNWI, Family Offices and Private Banks
-Â Â Â Â Â Â Â Â Â 1/3: institutional investors
What new features/innovations do you plan in 2014? Is going international an option?
In 2014, we launched the Fund #3 and the Fund #4. By the end of the year we plan to invest a large chunk of money in R&D (big data, scoring & statistics, anti-fraud, etc.) Going international is an option weâ€™re still assessing.
Where do you see Pret dâ€™Union in 3 years? Is P2P Lending a threat to banks?
In three years we see PrÃªt dâ€™Union with 1-2% market share in France and maybe with branches in Europe! P2P Lending is an alternative to banks (not a threat) â€“ there are many types of partnerships that could be envisaged with banks.
P2P-Banking.com thanks Charles Egly for the interview.