Communitylend Closes – Company Focuses on FinanceIt instead

wiseclerk 2 Comments

Today Canadian p2p lending site Communitylend announced that it will close the p2p lending marketplace to focus on its consumer lending business. Communitylend will continue to service existing loans; there will just be no new ones.

Quote from the announcement:

If you have been following the CommunityLend Peer to Peer (P2P) Lending story over the years you might have been wondering why we have been so quiet here here recently.   The short answer is that we have been trying to decide how much more time to spend on our P2P Lending site in light of a larger and faster growing consumer lending business we also operate called Financeit™.

We have now made the decision that we will be suspending the operations of our P2P lending site so that our team can focus solely on Financeitâ„¢.

This has not been an easy decision for us but one which has come about over time because of our observation that P2P Lending, as it needs to operate within the Canadian regulatory system today, has enough headwinds blowing against it that getting to a significant scale was going to be both expensive and difficult.   As we searched for solutions to these challenges as a P2P Lending operator, we kept our focus on our desired goal, to create a lending product for Canadians that gave them a less expensive and more convenient way to get an instalment loan.

We realized that we needed to get closer to where the borrowing “transaction”’ occurred instead of recruiting the borrower after the fact.  People buy things in a store location (offline and online) and too often just use their credit cards and then carry balances with high interest rates.  We realized that helping people at this transaction moment was the key to driving interest in our lending product.  This conclusion led us quickly to focus on sales finance and starting in late 2010 we launched a market leading sales finance platform called Financeitâ„¢. Continue reading →

Crowdcube Celebrates First Birthday – Crowdcube Infographic

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British P2P Equity marketplace startup Crowdcube celebrates its first anniversary (Happy Birthday from P2p-Banking, too :-)). Lately Crowdcube picked up speed substantially in attracting more and more startups pitching for funding. While investors are currently very selective in what to fund, the volume funded has shown nice growth too. The following infographic by Crowdcube illustrates that (see ‘Amount invested’).


(Source: Crowdcube) Continue reading →

How Do the Efforts of Prosper and Lending Club in Search Engine Marketing Compare?

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Internet ventures are dependant to a certain degree to new visitors that are referred to them via search engines. A visitor that did a search on a very specific search term, e.g. ‘get a personal loan’ will have a very high chance to sign up if after that search he is introduced to the Prosper or Lendingclub website. There are tools that measure how ‘visible’ a domain is on Google and other search engines providing an index chart, that allows to compare the visibility of several websites.

Prosper’s visibility index (blue line) is much higher than Lendingclub’s. Prosper.com ranks good for more and more important keywords in organic search rankings. Organic search means, that Prosper shows in a the search results at search engines that are not paid ads. But which search terms do the actually rank for? Continue reading →

Adwords Marketing Activity of British P2P Lending Marketplaces

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I did some research on use of Google Adwords in the online marketing strategy of Zopa, Funding Circle and Ratesetter.

Who is most active in search engine advertising?

I was surprised to see that Funding Circle is the most active in advertising on Google Adwords.

The chart shows that Fundingcircle had active ads nearly the whole year, while Zopa ran the ads only for certain intervals and Ratesetter only gave it a small try. Continue reading →

P2P Lending Predictions For 2012

wiseclerk 1 Comment

I really like this time. The new year lies ahead with crispy, yet unknown innovations. What p2p lending developments might happen in 2012. Here are some personal opinions.
Last year I failed big time with most of my predictions for 2012 not coming true.

Deeper integration of mobile (probability <25%)
Can you use a p2p lending service from a Smartphone? Sure. Some even have special apps for that purpose. But that’s not what we are talking about here. We are at the advent of a couple years timespan where several players (compare this infographic) will be fighting over market shares in the developing mobile payment market. If there is a role for p2p lending services, it is yet undiscovered (aside from the use p2p microfinance makes of it in underdeveloped countries).

Introduction of a p2p financed ‘credit card’ (probability very low)
Carried over from last year – did not happen
I envision a p2p lending service where the borrower does not get a loan in one full amount initially but can access liquidity on demand (within a predefined credit line). From the funding side this would work somewhat like lenders investing in Ratesetter’s rolling monthly loans. On the borrower side the customer could either request an additional payout via a web-interface or more sophisticated the service could issue a branded credit card / debit card for that purpose, enabling the customer to access cash instantly on an ATM.
This concept has very interesting advantages as it allows the p2p lending service to build a durable relationship to the borrowers. And for the borrowers it offers the potential of lower rates on short term debt than the high rates credit cards typically carry.

Continue reading →

Review of My P2P Lending Predictions For 2011

wiseclerk 1 Comment

In January 2011 I wrote down my predictions for p2p lending trends in 2011. Now let’s see how far I was off. The black text is my original prediction, with the review added in green and yellow.

Advent of whitelabel providers (probability 100%)
Okay let’s start this with a safe bet. In 2011 there will be 1-2 companies offering a solution that can be branded and used by p2p lending services and / or p2p microfinance sites. The interesting question here is how the acceptance by potential customers will be. My guess is that it will be slow selling until the companies have set the first pilot customer live.
While there are now whitelabel providers, their business seems to have been very slow in 2011. It seems that the first areas where we will see some activity is possibly p2p equity. As for conventional p2p lending – the companies supplying solutions have become more sophisticated and at least one as adopted their price model. It is now more a revenue sharing deal rather than a big upfront payment, that most startups could struggle with.

Introduction of a p2p financed ‘credit card’ (probability very low)
I envision a p2p lending service where the borrower does not get a loan in one full amount initially but can access liquidity on demand (within a predefined credit line). From the funding side this would work somewhat like lenders investing in Ratesetter’s rolling monthly loans. On the borrower side the customer could either request an additional payout via a web-interface or more sophisticated the service could issue a branded credit card / debit card for that purpose, enabling the customer to access cash instantly on an ATM.
This concept has very interesting advantages as it allows the p2p lending service to build a durable relationship to the borrowers. And for the borrowers it offers the potential of lower rates on short term debt than the high rates credit cards typically carry.
Like the idea and want to discuss/develop it further? Self-promotion plug: You can hire me as a consultant.
Has not happened.

A bank will acquire an existing p2p lending service (probability <25%)
Carried over from last year – did not happen
2011 might see a bank (or other financial institution) buying a running p2p lending service.
Buying will be much faster, cheaper and risk-less than if the bank tries to build a new service.
Largest Italian private Bank bought at least a part. Continue reading →