CommunityLend announced that lenders and borrowers from British Columbia can use the p2p lending service now. It is the third province added after Ontario and Quebec.
CommunityLend
CommunityLend Taps Broker Market
Canadian p2p lending service CommunityLend announces:
MorWEB partners with CommunityLend Inc. to provide direct access to
unsecured lending options for the Canadian Mortgage Broker market
Marlborough Stirling Canada (MSC) is pleased to announce that direct access to CommunityLend, Canada’s only online Peer-to-Peer lending service, will now be available to the broker market using MorWEB.
MorWEB brokers will now be able to seamlessly refer clients directly to CommunityLend to arrange unsecured loans from private investors. This will provide another value added service to customers of mortgage brokers using MorWEB. Phase one of this novel integration is now available on the MorWEB platform with a more comprehensive integration scheduled for later this year.
CommunityLend, …, launched earlier this year and is exploring a number of different marketing options to spread the word about its services and to recruit good quality borrowers looking for more competitive rates for small unsecured loans.
â€We are excited by the opportunity to work with one of Canada’s leading software providers to the Mortgage industry,†noted Michael Garrity, CEO of CommunityLend. “We understand the important role of Mortgage Brokers in helping their clients to find the best rates on loans to meet their needs. …â€
Since CommunityLend is restricted to accredited investors* by regulation, this marketing move uses an existing multiplier to reach potential lenders. It continues the earlier reported trend of existing financial institutions partnering with new p2p lending players.
(Source: CommunityLend blog)
*corrected – an earlier version of the article wrongly stated “institutional lenders” – see comment below
CommunityLend Launch – P2P Lending in Ontario
Today CommunityLend launched it’s peer-to-peer lending service in Canada. The service currently is available to residents of Ontario. Borrowers can use CommunityLend as an alternative loan source to bank loans or credit cards with the ability to set the desired interest rate themselves (CommunityLend sets minimum rates). Loan amounts range from 1,000 to 25,000 CAN$ for a loan duration of 36 months. CommunityLend is open for borrowers with a good credit rating (AA to C), which encompasses about 70% of the population.
The borrower has the option to define whether there will be an auction (competitive bidding) once the loan amount is funded, possibly getting him the advantage that the interest rate will be lowered during the auction time with lenders underbidding each other.
Due to regulation restrictions only lenders qualifying as “accredited investors” are allowed to participate as lenders. The minimum investment is 100 CAN$. Bids can be in multiples of 100 CAN$.
CommunityLend provides lenders information about borrowers to help them make decisions about lending, including; the credit categorization of the borrowers on the site (credit rating) , their assessed debt burden ( affordability rating), their assessed stability (stability rating).
CommunityLend actively steers lenders towards diversification with the rule that a lender can only bid a maximum of 10% of the amount of an individual loan and the bid maybe not more than 10% of his total overall investment.
Registration to the service is free. Borrowers pay closing fees of 1 to 2.5% percent of the loan amount depending on credit grade (minimum 75 CAN$) upon payout of the loan. Lenders pay 1% p.a. fee on the outstanding loan principal.
CommunityLend uses credit bureau data and bank account data to verify borrower identity.
The following video gives an introduction to CommunityLend:
I like the cheerful style of the website. All information is presented in an easy to navigate and easy to understand way.
Which P2P Lending Developments Happened in 2009 as Forecasted?
In January I published my predictions for p2p lending trends in 2009. Now let’s see how good my crystal ball was. The black text is my original prediction, with the review added in green and yellow.
More competition and entering more national markets (probability 100%)
In many markets multiple p2p lending services will compete for the attention of lenders and borrowers. In other markets, where there is no national p2p lending service active yet (e.g. Canada, New Zealand), p2p lending will be introduced by the launch of a service. Possible candidates include Communitylend and Nexx.
It is hard to predict when the dormant US players (e.g. Prosper, Loanio) will overcome the regulatory hurdles and if that step is lasting.
The British market which has (compared to other markets) rather low regulatory barriers so far is dominated by a single player - Zopa. I wonder if we’ll see the launch of a competitor there.
Multiple new services launched in 2009, e.g. Aqush in Japan, Sobralaen in Estonia, Uppspretta in Iceland as well as ill-fated Pertuity Direct in the US. Prosper reopened. The mentioned Communitylend and Nexx did not make it so far, though it looks like Communitylend missed a launch in 2009 only by weeks. No competition in Britain for Zopa yet.
Boom of social lending services/p2p microfinance (probability 100%)
2008 saw the launch of Babyloan, Veecus and Wokai. Kiva funded more the 1 million US$ new loans in a single week in the end of December. The steep growth of Kiva, MyC4 and other services will continue and new p2p microfinance platforms will launch.
Kiva continued it’s enormous growth and popularity. Vittana and United Prosperity launched. For MYC4 it was a hard year with decreasing loan volumes. Continue reading
CommunityLend Approaching Launch in Canada?
Microlending.ca reports that CommunityLend may be ready to launch soon as it cleared another registration hurdle. A legal document published at the Ontario Securities Commission site gives lots of details on CommunityLend’s p2p lending plans.
It also reveals that p2p lending in Canada will (at least initially) be restricted to accredited investors (high wealth individuals).
See Dan’s articleat Microlending.ca for a review of the document.
P2P lending trends to expect in 2009
As last year I’ll again attempt some predictions on what trends and developments can be expected in peer-to-peer lending 2009.
More competition and entering more national markets (probability 100%)
In many markets multiple p2p lending services will compete for the attention of lenders and borrowers. In other markets, where there is no national p2p lending service active yet (e.g. Canada, New Zealand), p2p lending will be introduced by the launch of a service. Possible candidates include Communitylend and Nexx.
It is hard to predict when the dormant US players (e.g. Prosper, Loanio) will overcome the regulatory hurdles and if that step is lasting.
The British market which has (compared to other markets) rather low regulatory barriers so far is dominated by a single player -Â Zopa. I wonder if we’ll see the launch of a competitor there.
Boom of social lending services/p2p microfinance (probability 100%)
2008 saw the launch of Babyloan, Veecus and Wokai. Kiva funded more the 1 million US$ new loans in a single week in the end of December. The steep growth of Kiva, MyC4 and other services will continue and new p2p microfinance platforms will launch.
First Banks experiment with own p2p lending applications (probability 50%)
While p2p lending volumes are far from being a business threat to banks – banks do watch the developments. Possibly in 2009 a bank will launch its own p2p lending application. The principal aim will not be to generate revenue, but rather to collect experience and to gauge acceptance by the bank’s customers. It will be interesting to see banks testing the water on their path to implement a p2p lending concept that supplements their core business.