Funding Circle Raises 1.1M to do P2C Lending

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London based Funding Circle has announced that it has raised 1.1 million US$ form undisclosed private investors and will launch it’s p2c lending service Fundingcircle.com in Q2 2010.

Director and co-founder James Meekings informed P2P-Banking.com:

When the platform launches later this year, people will lend small amounts to a range of different, creditworthy businesses to spread their risk. In turn, those businesses will be borrowing from a multitude of people to get a lower interest rate. … Funding Circle will also empower people to support their local community, by allowing lenders to target businesses with characteristics, such as locale, that are valued by them.

Small businesses will initially be able to apply for unsecured loans of 5,000 to 50,000 GBP. The businesses are checked for fraud and must meet a number of minimum credit requirements verified by the UK’s leading credit agency. Experienced underwriters then further analyse and screen businesses before allowing them onto the Funding Circle platform.

MyMicroCredit – P2P Microfinance to the Needy

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Karl Rabeder was a successful entrepreneur and rich. But being a millionaire did not make him happy and he was seeking a purpose in life. So he sold his villa in Austria, his house in France and his 5 sailplanes and moved into a small 1 room apartment in Innsbruck.

Now he dedicates his time to the p2p microfinance non profit he founded: MyMicroCredit.org. MyMicrocredit enables lenders to fund loans to needy persons in Latin America, Asia and Africa with the objective to become self-employed. Currently MyMicroCredit partners with the MFI Apoyo Integral in El Salvador, Nicaragua, concentrating on funding education projects for agriculture teachers.

I contributed 25 EUR towards a 24 months loan. The website display of projects (see left) bears resemblance to Kiva. No registration is necessary to lend. This allows fast and easy funding but has the disadvantage that lenders cannot login to see a portfolio of what loans they did fund.

Lenders will by notified be email upon repayment of a loan and can then decide to reinvest or withdraw their money.

(Sources:  Chrismon, P2P-Kredite.com)

Smava Offers Debt Conversion

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Recently p2p lending service Smava.de introduced a new offer aimed at borrowers that want to refinance a loan they have at a financial institution. If the loan request at Smava is funded by lenders, Smava will deal with the financial institution directly acting upon a certificate of authority signed by the borrower.

The loan amount of the new loan is not paid out to the borrower – instead it is directly transferred to the financial institution paying off the previous loan.

There is no extra charge for this service (the normal loan fees apply). Smava makes it easy for the borrower to replace conventional bank loans by peer-to-peer loans.

(Source: P2p-Kredite.com)

My Myelen Loan was Repaid Early

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Last year I lent via Myelen.com to an entrepreneur in Mexico.

In the Myelen p2p microfinance concept the lender signs a contract with the MFI and the MFI takes the default risk of the individual borrowers. The lender carries the market risk that the MFI does not repay the loan. Furthermore at Myelen the MFI covers the currency risk – but for most lenders there is still a currency risk because the loan currency at Myelen is Czech Koruna (CZK).

My 5,000 CZK loan was repaid early by the Mexican MFI since it stopped accepting foreign currency loans to change its legal status. I was repaid 5,115 CZK the total amount plus the accrued interest. The initial 187.50 EUR invested brought back 196 EUR on my account after 7 month – not a bad results.

I did invest in this loan mainly to test the service, since Myelen was previously unknown to me. The experience was good – everything went smoothly. I was notified of the early repayment via email and the money arrived automatically in my bank account.

Note that there were no fees at all for me involved – neither banking fees nor any fees my Myelen.

Currently there are several Mexican loan offers listed on the platform. Offered interest rates range from 4 to 7.5 percent (depending on amount).

B2B Loans Introduced at Isepankur

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IsePankur, the Estonian P2P banking site, this recently added three innovations to their platform:

  1. Loan auctions that end immediately when the loan request is 100 percent funded
  2. Business accounts enabling Business-to-Business, Consumer-to-Business and Business-to-Consumer lending and borrowing
  3. An arbitrage court that will be in charge of solving disagreements coming from the loans, incl. defaulting loans

isePankur decided to add a new auction type based on requests from the borrowers that allows the borrower to choose if the auctions ends after a set time period or when its fulfilled 100 per cent. The borrowers currently have an alternative to borrow from banks, pay-day loan companies or isePankur. The two former institutions provide the loan to the customer with-in 1 to 3 days from the application. Hence some of customers asked to implement a system by which they would be able to choose between a quick financing or a low interest rate in order for them to be more willing to use the peer-to-peer platform.

isePankur also launched an important new feature allowing legal entities to register, lend and borrow on the site. The maximum loan amounts (only for companies) have been increased to 150,000 EEK (approx. 13,175 US$), approx 15 times higher than the loan limit for individuals. There were three major reasons for the addition: (a) small companies lack financing opportunities as the banks have stopped providing credit whilst there are no official debt markets in Estonia; (b) companies with excess funds do not have simple investment opportunities that would provide them with returns of over 3-4 per cent per annum; and (c) there is a 0 per cent corporate tax in Estonia hence most of individuals with excess capital keep it in their companies’ accounts. isePankur aims to increase the loan volumes on the site multi-fold after the public and companies have had enough time to get familiar with the benefits provided by the business services.

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P2P Lending for Small Businesses Reaches France

eKwiti 1 Comment

Finally! We all long waited for a genuine P2P lending service in France.

FriendsClear launched on February the first a platform that enables small businesses to advertise their projects and ask for a loan up to 15,000 Euro.

Lenders can then apply for the loan for an amount between 1,000 and 3,000 Euro. If a project is validated, once it receives enough loans propositions.

The rates are fixed to 5% for the lender and 6.25% for the borrower. The spread finances the platform and their Bank partner: Crédit Agricole.

To ensure the seriousness of the projects, it costs 15 Euro to advertise a project. Most of the project information is only available to registered lenders.

To launch this service, FriendsClear organized a project contest. After the public vote (over 10000 votes), a jury will choose the best project between the five finalists. The winner will be rewarded by a prize of 10,000 Euro.

This enables serious business growth for the small startup FriendsClear. In order to support it, they recently raised new funds and it seems that they are looking for new co-workers on this project – but I couln’t find precise information on their recruitment needs.

This is very encouraging sign for finance 2.0 in France, and we believe that more will follow soon, from other actors but also from FriendsClear, which have many projects for the future (P2P for individuals, open a branch in another European country).

An interview of Friendsclear founder Jean-Christophe Capelli [in French]