Author: wiseclerk

Prodigy Finance – p2p lending for MBA students only

wiseclerk 1 Comment

Prodigy Finance has an elitist approach. Only MBA students of selected schools are eligible as borrowers:

We have built our model with the specific profiles of top international MBAs in mind. Our close partnerships with the schools means that we are able to approve the vast majority of applications and are able to lend to participants from most countries (…). Provided you are accepted at one of our partner schools, it is very likely that we will be able to approve your loan in principle. However at this stage it is important to remember that we are still in pilot stage and thus our ability to provide funding is limited by the size of the funding pool that we have.

But that’s not all. Lenders are required to be alumni of the school, too. Minimum investment amount is 10,000 Euro. Loan term is 7 years with a 16 to 18 month grace period. Interest rates are tied to the underlying base rate.

Currently only  borrowers and lenders from INSEAD are accepted.

The interesting part is that Prodigy Finance aims for cross-border, multi-currency lending:

The currency of the loan balance is determined by the currency in which tuition fees for the university are paid. If you are only lending to one university, your funds will be held in that currency alone. If you choose to spread your funds to other universities, we will convert your funds at the best available rate (and with your consent).

Prodigy Finance was founded by Cameron Stevens (CEO), Ryan Steele (COO) and Miha Zerko (CTO).

P2P lending companies by loan volume – Jan 09

wiseclerk 1 Comment

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.

MTN Uganda pledges 250,000 US$ to fund small businesses through MyC4

wiseclerk

MTN Uganda, a telecommunication company with 3.5 million customers, will invest 250,000 US$ to fund loans to small and medium scale enterprises via MyC4.

“This is a great opportunity for us to champion the notion of an African Company helping fellow Africans instead of the common perception that Aid should always come from “Abroad”” said Mr. Van Veen during the announcement and launch of the partnership at the Sheraton Kampala Hotel. The capital investment guidelines require that MTN’s loan contribution must constitute a minimum of 33 percent of the total loan required.
Under the agreement, $50,000 would be invested immediately in a six months pilot phase which is expected to shed light on how best to administer the funding. “The learning after the pilot phase will guide us on how to manage the capital repayments and their re-investment over the three year period”.

Smava.de raises fees

wiseclerk 1 Comment

In Germany p2p lending service Smava.de will increase its fees in February. Smava management said the fee increase is necessary to build a sustainable business and points out that now 20 months after the launch the value proposition of Smava has been verified. Median ROI is given as 9.4% with 90 percent of lenders (best and worst 5% cut off) earning between 4.7% and 12.9% ROI per year.

Old fee structure:

Lenders: no fees
Borrowers: 1% of the loan amount

New fee structure:

Lenders: 4 Euro (approx 5.30 US$) for each successful bid
Borrowers:

  • 2% of the loan amount, minimum 40 Euro, for 36 months loans
  • 2.5% of the loan amount, minimum 60 Euro, for 60 months loans

This increase will more than triple Smava’s revenues from 8,000 Euro per month to 27,700 Euro per month (estimate based on 800,000 Euro loan volume per month; 5,500 Euro average loan amount; average bid amount 330 Euro; 50% of loans for each loan duration).

While the fee height is tolerable for most lenders, I am somewhat sceptical whether Smava is attractive enough for borrowers under the new fee schedule and will be able to continue its required growth.

Call for EU legislation to encourage microcredit schemes

wiseclerk 5 Comments

There is a new initiative “Call for EU legislation to encourage microcredit schemes“. One aim of the initiative is:

EU-wide framework on supervision and regulation

There also needs to be an EU-wide regulatory framework for non-bank providers of microcredit (banks are already covered by existing rules), defining them as non-deposit takers, with the ability to conduct credit only activities and to on-lend. There should be harmonised, risk-based rules on authorisation and supervision.

This would help p2p lending services.

Thank you to Peter Petrovics of Noba.hu for supplying the link.

Which sites do offer p2p lending statistics?

wiseclerk

When analysing numbers on p2p lending activity, users can rely on independent third party sites gathering statistics for many p2p lending services. These services either obtain the raw data via an interface provided by the service or they do parse the web pages of the service to collect the data.

Most of the statistic sites offer reports and tools to analyse and graph the overall development of the marketplace as well as the status of an individual lender’s investments.

The majority of the users are lenders, as the borrower usually needs the information only once – before applying for a loan – to determine what interest rate is appropriate.

Tools for Prosper:

Tools for Lending Club:

Tools for MyC4:

Tools for Zopa UK:

Tools for Smava:

Tools for Auxmoney:

Tools for Boober NL:

Feel free to copy this list, but please do set a link citing this page as source. If you know another social lending / p2p lending stats site, please let me know.

Long term readers may remember that the Wiseclerk.com domain initially started as a report site on Prosper.com. It was in fact together with Savagenumber.com the first service of this kind.

(Photo credit: ArtemFinland)