P2P Lending Year-End Review 2010

As the end of 2010 approaches here is a selection of main peer-to-peer-lending news and developments covered by P2P-Banking.com:

(Photo by paul (dex))

Yes Secure to Add Secondary Market

Yes-secure, a British p2p lending marketplace launched in June 2010, will very soon add a secondary market called Secondary Loan Slice Market.

According to information the company provided P2P-Banking.com, the secondary market will have the following features:

Advantages for Loan slice buyers:

• Loans offered at premium and discount: Lenders are able to buy loan slices from other lenders at a premium or discount to the principal remaining amount. Lenders can invest in quality loan slices which they missed out on earlier.

• Ability to view repayment history: Potential buyers for the loan slices can view detailed information about the borrower repayment history, enabling them to make informed low-risk decisions based on track record of reliable repayments.

• Earn interest from day one: As the existing loans slices can be transferred within a few minutes, they can start earning interest with immediate effect.

• Build a balanced investment portfolio: Lenders can quickly build themselves an active and balanced portfolio by picking and choosing through different markets, rates and terms; this automatically leads to risk-diversification through loan portfolio management.

The advantages for Loan slice sellers:

• Encourages liquidity: Investors can easily generate cash as and when they require by selling their loans slices to other registered members of YES-secure.

• Flexibility: Investors can easily manage their investment portfolio, buying and selling chosen loan slices and fine-tuning their lending portfolio to suit their risk profile.

• Loans sold at premium or discount: Lenders can set a price for their loan slices at rates within +/-10% of the remaining principal amounts of their loans.

It is interesting to see that Yes Secure does not face the regulatory challenges Zopa cites (see: Zopa Rapid Return Secondary Market) or has overcome them.

Interview with Yes-Secure

In early summer 2010 Yes-secure.com launched the second p2p lending service active in the UK. Dr. Chandra Patni, CEO of Yes-secure answers my questions.

P2P-Banking.com: Dr. Chandra Patni, please tell us about the background of the Yes-secure management team and what lead to entering the p2p lending market?

Dr. Chandra Patni: I came up with the business opportunity in 2008, having reviewed Zopa I felt that a social networking based person to person lending marketplace site could become a successful alternative to Zopa. I realised there were opportunities to build and complement the social lending market. Consumers need choice. YES-secure.com allows person-to-person lending alongside social networking as people want to know who they are lending to.

P2P-Banking.com: How is Yes-secure funded?

Dr. Chandra Patni: YES-secure.com is funded by private investors alongside the directors of the company.

P2P-Banking.com: What benefits does Yes-secure offer to lenders and borrowers?

Dr. Chandra Patni: Lenders: YES-secure.com provides UK savers and investors a new way to beat inflation and earn better returns than by investing their savings in fixed deposits in a bank. Along with the introductory offers and waivers, there are a wide range of markets (A*- E) allowing lenders to manipulate their investment across various markets getting them high, assured and steady returns. Debit card verification upon registration, stringent underwriting procedures and assigning markets in keeping with the borrowers’ creditworthiness make YES-secure a safe investment destination. Additionally, YES-secure offers a secure means of social network based lending and borrowing implying lower default rates and higher returns for lenders.

Borrowers: Borrowers can get competitive rates from real people. They simply describe how much they are looking to borrow, over what period, and the maximum interest rate they are willing to pay. Then they can simply sit back and watch people bidding to lend to them. Once they find a rate they like, they can accept it and get the money paid straight into their bank account. More traditional methods of personal loan approval rarely take personal information (such as connections, personality, and general circumstances) into account and are approved or declined based solely on credit history and financial circumstances. YES-secure combine both the important credit background as well as pertinent personal information on each borrower. Continue reading