Here are some recently published articles on several p2p lending topics:
Sociallending.net: The Best Day to Borrow Money at Lending Club
P2P Lending News: Prosper and Lending Club Compete for Investor Market Share
CreditUnionTimes: Consultant Warns Banks and CUs Risk Becoming Passé
DoughRoller: Lending Club Investment Strategy (Update)
Janari Rahablog: Omaraha.ee laenude vahenduse portaal
GlobalVoices: Brazil: Crowdfunding Potential
P2P Lending and crowdfunding are two totally different concepts you say? True so far.
P2P Lending means the lender loans the borrower money. The amount is repaid together with interest.
Crowdfunding is usually applied to describe concepts were a crowd decides to finance project. The motivation there is to see the project getting done. The funds are not paid back but spent on the project and investors are sometimes rewarded with the art or products that are a result of the project. A good example for a crowdfunding platform is Kickstarter, which P2P-Banking.com covered earlier – see article: ‘Kickstarter – Pledge Money to Fund an Artist‘.
Moneyauction creates ‘Reward Funding’ – merges P2P Lending and Crowdfunding
Moneyauction, a leading p2p lending service in Korea, now announced their ‘reward funding’ option. Continue reading
A new US patent filed claims that may be a good idea! The patent application “System and method for assessing credit risk in an on-line lending environment” describes a risk assessment method, where the first level links on a social network would be checked for a borrower. It aims to derive insights from looking at the age and “activity” of these first level contacts.
Does What Your Friends Say About You Determine If You Are Creditworthy?
In a step further the method suggests to “invite linked users to provide a personal endorsement of the borrowing party; sending an endorsement invitation to identified users; and receiving endorsements from the identified users, the endorsement providing a rating of the user trustworthiness based on a numerical scale; determining and aggregate endorsement score from received endorsement which is included in the assessment score”
Assessment score to be used as one of several criteria
The patent filed by Canadian company Neobanx Technologies, Inc was previously already filed in Canada. Inventors Ronald N. Ingram, Dylan Littlewood and Aston Lau describe the whole process with assessment score and endorsement score being only 2 of multiple elements that are used to assess the risk.
The potential problems with using data from social networks for the purpose of risk assessment in p2p lending were already described in detail in the article: “For Debate: Can Data from Social Networks be Used to Reduce Risks in P2P Lending“. I still think that social network data could be used to some degree as additional data for lenders – but not to the degree this patent seems to imply.
It would be most interesting to see this implemented and monitor how it works out.
What is your opinion, dear reader?
Are women more risk-averse then men when it comes to lending money to strangers via p2p lending services? A recent study by Nataliya Barasinska, analyzed what impact gender has on the investment decisions. In the study, which was supported by a grant by the European Commission, she looked at bidding and loan data of the German p2p lending service Smava for the time span from March 2007 to March 2010.
Women are a minority among lenders, but are no more risk-averse than men
Only about 10% of the lenders at Smava are women. But they do not perceive and react to risks differently than men, when it comes to picking loans for investments. Continue reading
Regulation is an often met obstacle to p2p lending. This time Friendsclear in France is affected and has announced a temporary stop to new loan funding. The Banque de France has requested changes in the operating procedures that Friendsclear and its banking partner Crédit Agricole use.
Friendsclear expects the suspension of funding of new loans to last at least one month. Servicing of loans already funded in the past is unaffected.
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€