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P2P Lending in Poland and a Portrait of Kokos.pl

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This is a guest post by Krystyna Mitręga-Niestrój, University of Economics in Katowice, Poland

P2P lending develops quickly in the world in recent years. The platform Kokos.pl was the beginner at social lending in Poland in February 2008. The following portals began to operate shortly thereafter: Finansowo.pl, Monetto.pl (both in March 2008, however Monetto is not operating any more) and Smava.pl (equivalent to German Smava.de platform). During the first four years of the Polish p2p lending market the value of loans was estimated at PLN 130 million (approx. USD 43 million). It consisted only a small number comparing to the value of consumer loans granted by banks – more than PLN 127 billion (approx. USD 42 billion), as of February 2012. Almost half of this amount (PLN 61 million, approx. USD 20 million) was borrowed through the platform Kokos.pl, which so far has more than 180 thousand users. After five years (situation at the beginning of 2013) from launching the first p2p platform approx. half a million the Polish residents borrowed approx. PLN 250 million (USD 58.5 million) (5 lat pożyczek społecznościowych, 2013). The owners of the p2p platforms earn money mainly on fees charged for transactions. It should be noted, that the information about the p2p lending market in Poland is limited and current, comprehensive data are lacking.

The most important players on the Polish social lending market are: Kokos.pl (with almost 80% share in invested funds through p2p lending platforms), Finansowo, Sekrata, Pożycz, SzybkoiPewnie, Bilonko, Zakra (Zestaw Narzędzi Pożyczkodawcy, 2013). The situation on p2p lending market in Poland is dynamic, however there is more positive tendencies associated with entering of the new players on the market, than the bankruptcies of the p2p platforms. The two examples of the latter are the collapse of Monetto.pl and Ducatto.pl. The Polish peer-to-peer lending market seems to be interesting for foreign p2p platforms (for instance the entrance of Swedish TrustBuddy in 2013).
Taking under consideration the information from the largest p2p platform Kokos.pl (the data include the 5 years period, from the launching of the platform) we can state that the statistical investor and borrower came from Masovian Voivodeship (is the largest, the most populous and the wealthiest voivodeship in Poland), are on average 34 and 33 years old. The statistical borrower borrows on average PLN 2,026 (USD 1.500) for 11 instalments. The average salary is equal to PLN 2,723 (approx. USD 2000).

At the beginning when first p2p lending platforms have launched a great part of Polish society was skeptical about such form of investing and borrowing. The threat of fraud and bankruptcies of p2p platforms hampered the development. However, thanks to changes and refining methods of verification the p2p platforms have became safer. The popularity of social lending is growing steadily in Poland. This trend is, among others, influenced by more attractive offer and promotions of p2p lending platforms. Continue reading →

P2P Lending In Japan – The Current Situation

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This is a guest post by Tomoyuki Sugiyama, Representative Director of Crowdcredit, Inc (full bio at the end of the article).

Advent of P2P lending in Japan

maneo, Inc. and Exchange Corporation KK were the first P2P lending platform operators in Japan. In 2007, maneo, Inc. was established and it started the registration processes with Japanese authorities which were necessary to run the platform. And it launched the platforms – maneo – in 2008. Exchange Corporation launched its P2P lending platform AQUSH in 2009. Also SBI group established a subsidiary to run P2P lending platform – SBI Social Lending Co., Ltd. – in 2008 and launched the platform in 2011.

maneo at first focused on consumer loans, but soon changed its focus to SMEs loans. AQUSH focused on consumer loans and widened its line-ups to real-estate collateralized loans, overseas consumer loans (investments are made in the loans originated by LendingClub) and loans of which borrowers are solar energy power plant operators in early 2013. SBI Social Lending focuses on securities collateralized consumer loans.

From regulatory perspective, any legal entity (person or company) which lends money in Japan must make registration under Money Lending Business Act, which prevents the P2P lending platform operators to offer a platform which personal investors lend money directly to the borrowers. Hence in Japan, personal investors effectively lend their money to the borrowers through investing in the P2P lending platforms’ businesses which they lend money to the borrowers as the operators of investment funds (Anonymous Partnership Agreements under Japanese commercial law).

Recent trend in Japan

Compared to the growth of P2P lending markets in the UK or in USA, Japanese P2P lending market grew moderately – currently the amount of outstanding loans managed by the largest P2P lending platform, maneo, is estimated to be around 60 million dollars. This is assumed due to over-banking in Japan – in Japan, national average loan to deposit ratio of traditional banks is below 70% and the banks lend quite aggressively, which is quite different from the situation in the UK or in USA where the banks are lending less and less in de-leverage process of their balance sheet in post Lehman crisis period. Borrowers in Japan can much more easily access to traditional financial system compared to the borrowers in the UK or in USA and national average lending interest rate of the banks in Japan is currently 0.887%.

As a result, no operator entered into P2P lending market in Japan after SBI Social Lending and there were only three P2P lending platforms in Japan until 2013.

In late 2012, Crowd Securities Japan Co. Ltd. (previously Midori Securities) announced to launch the fourth P2P lending platform in Japan – Crowd Bank – in 2013 and they launched it in late December in 2013. Crowd Bank offers SMEs loans, real-estate collateralized loans and also overseas microfinance loans which the platform lends to MFIs in Asian region.

Also in early 2013, Crowdcredit, Inc. announced to launch the fifth P2P lending platform in Japan and it was launched in June 2014. Crowdcredit became the first P2P lending platform in Japan which focuses only on cross-border P2P lending. Crowdcredit, as the operator of the platform, has invested in credit market in Peru in Latin America as a start. Continue reading →