List of P2P Lending Forums

Peer to peer lending is innovative and new. New users usually have lots of questions when grasping the marketplace mechanisms. Beyond the FAQ of the p2p lending service, a great place to learn is usually a forum, where users (mostly lenders) exchange experiences and post and answer questions.

There are “official” forums provided by the lending services and independent ones. One of the first ones, the official Prosper forum, became one of the most notorious ones. After Prosper “moderated” negative and critical posts it later deleted the initial forum in total. When a copied version of the forum’s archive was made available on seperate internet site Prosper tried to  shut the site down, but failed.

But this is an extreme example. I found that on nearly all other forums a very helpful and supportive attitude rules.

List of p2p lending forums

General

Focus on one p2p lending service

If I have missed any great p2p lending forum, please comment with the URL and I will add it to the above list. Thank you.

(Photo credit: wili_hybrid)

P2P lending companies by loan volume – Jan 09

P2P lending is spreading internationally. While the biggest loan volumes are generated in the US market, many p2p lending websites have been established in other international markets.

P2P-Banking.com has created the following overview table listing services that are in operation and ranked them by loan volume. The loan volumes are not directly comparable for they are cumulative since launch of each service and represent different time spans.

In total approx. 740 million US$ have been funded through peer to peer lending/social lending services so far worldwide.


This image may be reprinted on other internet sites, provided it is not altered or resized and the following text (including the direct link to this article) is given as source directly below the image:
Source: P2P-Banking.com

Since the previous version of this table especially Zopa (UK), Lending Club and Kiva thrived. With Prosper, Loanio and Fynanz halted, Lending Club profits from the situation.


This image may be reprinted under the same conditions as the first one.

Pertuity Direct – where is the p2p lending part?


Invest In People with Pertuity Direct.
Initially while browsing the PertuityDirect.com and the related NationalRetailFund.com site I was a bit puzzled where the peer to peer lending aspect is to be found? I learned:

  • Lenders buy shares
  • Borrowers credit information details are never shared. Only Pertuity Direct knows them
  • There is no auction
  • Interest rates are set by Pertuity Direct

Then I read the National Retail Fund II prospectus and learned that the Fund is allowed to do other investments then funding loans of Pertuity Direct borrowers. It may:

  • buy T-Bills, money market funds and other cash equivalents
  • buy bundled consumer note securities, even if part of them is deliquent

The NationalRetailFund website explains:

How is this related to Pertuity Direct?

Pertuity Direct is a separate entity and is one of the fund’s service providers and acts in an administrative role. They underwrite and originate borrower loans. Those loans are an investment option for this fund.

On the same FAQ page I then found what this all has to do with p2p lending:

Where is the ‘Social’ aspect in all of this?

If you choose, you have the option to engage in the social lending network associated with the borrowers within the funds. By selecting the option, you will be able to see the various borrowers in the funds, get to read their stories and track their progress over time. You will also have the ability to engage directly with any borrower or group of borrowers that you find compelling and help them accomplish their goals with a rewards program.

Lenders can use so called Pertuity Bucks, which they receive free upon sign up, to reward borrowers whose stories they find compelling. The balance of the borrower is reduced by the amount of Pertuity Bucks the borrower receives.

My review summary of the p2p lending aspect of Pertuity Direct

While it may be a smart construct in respect to overcoming regulation hurdles it offers much less direct peer to peer interaction between lender and borrower.

  1. Pertuity Direct decides which loans get approved
  2. Pertuity Direct sets the interest rates
  3. The fund decides on the investment strategy in detail
  4. Interaction takes place only through the Pertuity Bucks community feature

But let’s see how the concept develops and what borrowers and lenders think about it.

What is your take on this, dear reader?

P2P lending companies by loan volume

P2P lending is spreading internationally. While the biggest loan volumes are generated in the US market, many p2p lending websites have been established in other international markets.

The services can be divided in three categories:

  1. p2p lending marketplaces (e.g. Prosper, Zopa, Lending Club, Smava) – participants driven mainly by economic motives
  2. social lending services enabling micro financing (e.g. Kiva, MyC4) – participants driven mainly by social motives
  3. other concepts (e.g. Virginmoney which is special in the way that it does not do the matchmaking between borrowers and lenders, but supports the process between persons that already had offline relations- slogan “We manage loans between family and friends“)

Sites funding student loans can fall into any of these three categories or combine motivations.

P2P-Banking.com has created the following overview table listing services that are in operation and ranked them by loan volume. The loan volumes are not directly comparable for they are cumulative since launch of each service and represent different time spans.

Asked for a figure, a Microplace spokesman pointed out “…it is important to note that MicroPlace is not a P2P site.  We are a platform that offers investments to the retail public.“. No loan volume was quoted, but he stated “investments purchased on our site have enabled over 26,000 microfinance loans.

In total approx. 685 million US$ have been funded through peer to peer lending/social lending services so far worldwide.

This image may be reprinted on other internet sites, provided it is not altered or resized and the following text (including the direct link to this article) is given as source directly below the image:
Source: P2P-banking.com

If you are a representative of a p2p lending service and want your service to be included in the next update of this table, please send me an email with information about your company.

Classifying p2p lending services

More and more p2p lending services are launching, each catering to different markets and different target audiences. Some derive more features from "ancestors" Prosper or Zopa, some less.

All follow the aim to allow lenders to directly lend money to borrowers without a bank acting as intermediary. This aim is sometimes not pursued strictly to the point. Smava actually partnered with a bank to comply with regulation, Zopa US partnered with credit unions, but nevertheless it serves as comprehensive definition.

Dividing p2p lending services in categories could follow several possible factors:

  • price building mechanism (auction/non-auction; interest set by platform/by borrower/by lender)
  • purpose of loan (private/business/both)
  • social lending vs. lending for profit

I think the last factor is most useful for the definition of categories. It affects all parts of the service from marketing to operations. The differentiation is in the objective the majority of the lenders had when selecting the platform. Were they attracted by the motivation to help an individual through a loan or by the motivation to earn interest? Continue reading

iGrin – First p2p lending site in Australia launched

Earlier this month the first Australian p2p lending service iGrin.com.au quietly launched. Here is what Phil Hopper, iGrin's CEO told me, when I contacted him about iGrin's goals: 'We set out with the intention of being Australia's first and best P2P banking community. To date we have intentionally kept a low profile whilst we have gone about proving our business model and ensuring compliance with the Australian regulatory environment. The team behind iGrin has predominantly come from the banking industry and brings with it a wealth of product development, technology and lending experience. We have been impressed with the advances made in P2P lending overseas and are looking forward to applying these to the local Australian market and enabling everyday Australians to get great rates and great returns.'

Browsing the site, the main parameters are:

  • Borrower fees are 1% (for AA to D credit grades) or 2% (HR) or 90 AUS$ (whichever is greater) 
  • Lender fees are 0.5 to 1.5% annual loan servicing fee (depending on credit grade)
  • Loans are possible for amounts from 2000 to 25000 AUS$ (approx 22000 US$)
  • Lenders can invest from as little as 100 AUS$ to a maximum of 25000 AUS$
  • There is a bididng process, where the borrower sets the initial (maximum) interest rate he is will to pay and lenders bid down the rate (like at Prosper.com) 
  • Currently all loans are for a term of 3 years
  • The way the Australian credit rating works, simply appling (whether successful or not) for a loan may impact one's credit grade

A feature that differs from other p2p lending platforms is the 'Member direct loan' iGrin offers:

A service that iGrin provides to allow members to offer a loan direct to an individual. We will then undertake all of the transfer of funds and ongoing payments on behalf of the members. This is a great way for family or friends who wish to lend money to each other to have a third party (iGrin) manage all of the repayments and transfer of funds on their behalf. A formal contract is put in place between the two parties. It can also be a great way for someone to improve his or her credit rating. 

While a family and friends loan is possible on other p2p lending services too, it is noteworthy that iGrin charges lower fees for Member direct loans than for normal loans.

Excerpts of answers to other questions I asked Phil Hopper, CEO of iGrin.com.au:

P2P-Banking.com: Which background does the management have?

iGrin.com.au:  … The founders have over 50 years experience in Banking and Finance. The original founder and CEO is Phil Hopper who has a strong background in Banking and Technology most recently at the Commonwealth Bank of Australia and prior to that at Macquarie Bank. Continue reading

Kiva refines risk assessment

Social lending service Kiva has refined its risk assessment for participating MRIs (microfinance institutions). The changes and the mechanism are described here. Risks for Kiva lenders include Entrepreneur Risk, Fieldpartner Risk and County Risk. 

So far the default rate for Kiva has been 0.17% on a loan volume of $9.965.000 (4.4% of loans are one month late). When compared to Prosper.com default rates, that is an extremly good result. So far the MRI on Kiva with the worst performance is REDC Bulgaria, followed by an MRI that organizes loans to people in Uganda, Kenya and Tanzania.

Another interesting figure: The average time a listing is online at Kiva.org until it is fully funded is 1.24 days.

So far all my Kiva loans are repaying on schedule.

German Smava opens to lower credit grades

The German site for social lending Smava.de today allowed borrowers of the lower credit grades G and H to participate. Previously only borrowers of credit grades A through F could participate. According to information published by Smava, 80% of the German population have credit grades in the range A-F, while credit grade G accounts for 10% and credit grade H accounts for 5% of the population.

This move is contrary to the development at Prosper.com which started with a very broad range of credit grades and only later restricted borrower access tighter.

However Smava, so far has experienced not one late payment. Three payment cycles have been completed with 100% of borrowers paying on time.

Other changes at the Smava site today included a lower minimum bid of 250 Euro (down from 500 Euro) and a higher interest rate ceiling (maximum interest rate 18%; up from 15%).