Denmark

How Fairrates’ problems became IOU Central’s headstart

wiseclerk

IOU Central launched first in Canada. As I already mentioned in my first post on IOU Central they profited from the knowledge input the two founders of danish Fairrates.dk brought with them. Fairrates had problems with fraud cases due to incomplete access to credit histories.

Here are some interesting notes by Bartlomiej Owczarek from Virtuous Cycle taken at a conference in Poland where Fairrates founder Arkadiusz Hajduk, now product manager at IOU Central, gave a presentation:

  • The startup was initially located in Denmark
  • Two guys on a sofa
  • I liked the quote – “expert is a person who committed all possible mistakes in a narrow field of specialty”
  • Idea was inspired by Prosper
  • They didn’t bother with business plans and presentations (note: maybe not so good in the end, given later credit history problem, see below)
  • Nevertheless, they got angel from early on – entrepreneur, house builder
  • Features of their angel – did call from time to time, but otherwise didn’t require much reporting, in retrospect now they would prefer someone more of a “mentor” type
  • They coded for 4 months without office
  • Then they got office, at respectable location (good for customer trust)
  • They coded another 6 months when they had office
  • First version was seen and tested by some 30 people
  • Operating model assumed that they don’t make credit decision or take on risk – all this is on the lender
  • Highlight of the “growth” period – 90 minutes on the front page of a major business portal
  • After launch, lenders turned out not a huge problem; in a first week, one person offered equivalent of ca. PLN 50k
  • However, huge problem with (good) borrowers
  • Also, in Denmark there is no access to credit history (only yes/no credit problems query possible)
  • Side note: banks in Denmark do not care to advertise to people more than 25 years old, because no one ever changes the bank
  • They had two evident fraud cases
  • In the end, business model didn’t fly because of borrower problem (people took wait-and-see approach), resulting in the “decline” phase
  • Luckily, they were approached by people from Canada, who had non-technical capabilities in the area but needed technology platform, and they sold out
  • Angel apparently got 150% of his initial contribution
  • Lessons learned: don’t hesitate to kill your own ideas

(via Prosper Lending Review)

New MyC4 release

wiseclerk

Today a new MyC4 release went online. The new version allows multiple standing orders which can be targeted by country, provider and/or industry of the borrower. There are several small improvements in usability, e.g. display of borrower APR.

MyC4 users have transfered 507,000 Euro in funds, but so far only 214,000 Euro of those have been loaned. Demand in loan opportunities is lagging behind investor's cash looking for investments. The majority of lenders (investors) still is Danish – MyC4 is located in Denmark, but the number of investors in other countries is rising.

So far I am satisfied with MyC4. I have invested in more than 50 active loans – true microloans – sometimes my share is as low 10 Euro – and so far everything is going smooth. Another 16 bids are on open listing opportunities.

P2P Lending in Denmark offered by Fairrates.dk

wiseclerk

Today I received an email from Arkadiusz Hadjuk of Fairrates.dk informing me, that his company started to offer p2p lending in Denmark. Most of the following information was supplied by him.

At Fairrates.dk:

  • There are individual listings, both lending and borrowing
  • There are no groups
  • There is auction bidding down interest rates, both lending and borrowing
  • In case of non-payment (for over 1 month) a lender is assisted with
    a collection procedure
  • Minimum loan is 1000 DKK (approx. 135 Euro; approx $100)
  • There is no maximum a lender can lend
  • Maximum per loan is 50.000 DKK (approx. 6700 Euro; approx. $5100)
  • Borrower can request minimum 1000 DKK
  • Borrower can request maximum 50000 DKK until his income information
    is verified – then the limit is lifted up
  • Minimum bid is 1000 DKK
  • Only people over 18 years old with Danish CPR number and Danish bank
    account can lend/borrow
  • No interest on unlend deposits
  • Simple fee structure (borrower pays 1% of loan amount)
  • Risk assessment is based on information and documentation provided
    by borrowers.

I did technorati and Google searches for additional information. Since I don't speak Danish I could not find much additional information, only a profile of Arkadiusz Hadjuk and a CV of Robert Pawel Bialek (CEO).

Judging by forum activity at Fairrates.dk there is not much traffic yet.