Zopa has announced that it reached the milestone of 150 million GBP in loans facilitated. Zopa says the new loan volume per month accounts for between 1% and 2% of new personal loan volume made in the UK.
P2P lending service Lending Club announced yesterday that it has been selected as a World Economic Forum 2012 Technology Pioneer. Lending Club was selected from amongst hundreds of applicants from around the world that hold the promise of significantly impacting the way business and society operate.
The members say that the new UK trade body is set up primarily to ensure the growing sector maintains high minimum standards of protection for consumers and small business customers, as it brings much-needed new competition and innovation to the banking market. In Britain this year, peer-to-peer finance will account for more than £100 million of loans to individuals and small businesses. As new financial regulatory structures are put in place by the Government over the next 18 months or more, the Peer-to-Peer Finance Association will also work hard to ensure that the new rules will include effective regulation for the peer-to-peer finance market.
The association is open to other peer-to-peer providers subject to meeting the required standards. The Association has established a wide definition of peer-to-peer finance providers as: ‘platforms that facilitate funding via direct, one-to-one contracts between a single recipient and multiple providers of funds, where the majority of providers and borrowers are consumers or small businesses. Generally, funding is in the form of a simple loan, but other instruments may evolve over time.’
The Association’s Rules and Operating Principles set out the key requirements for the transparent, fair, robust and orderly operation of peer-to-peer finance platforms and cover: 1. Senior management systems and controls; 2. Minimum capital requirements; 3. Segregation of participants’ funds; 4. Clear rules governing use of the platform, consistent with these Operating Principles; 5. Marketing and customer communications that are clear, fair and not misleading; 6. Secure and reliable IT systems; 7. Fair complaints handling; and 8. The orderly administration of contracts in the event a platform ceases to operate.
Rhydian Lewis, CEO of RateSetter, said: “The message we want to send to the wider world is that Peer to Peer is working: Lenders across a number of sites are getting market beating returns on their savings, Borrowers are getting lower cost loans, and increasingly P2P finance is becoming more established in the mainstream. As an industry, we would all encourage clearer regulation of P2P finance (not least because it would address the perception that P2P is somehow not regulated). The Association will give us a platform with which to lobby for P2P to be considered on an equal footing with other financial services.â€
P2P Lending service Lending Club has raised another 25 million US$ funding.
Union Square Ventures led the Series D round and joins Lending Club as a Board Observer. All existing venture investors participated in the funding round.
“We are thrilled to welcome Union Square Ventures as an equity partner,†said Lending Club CEO Renaud Laplanche. “While we did not need additional funding, we could not pass up the opportunity to work closely with the USV team and their network of companies. USV will be instrumental in continuing to accelerate Lending Club’s growth and in leveraging our technology platform and network effect to simultaneously reduce the cost of credit to borrowers and enhance investors’ returns.â€
The new funding brings Lendingclub’s total funding to 77.7 million US$.
Recently Zopa UK removed the ‘Listings’ functionality that allowed borrowers to list individual loans. Listings were introduced in October 2007 as a add-on to the original Zopa markets model.
Here is the official announcement of Zopa regarding the removal of the Listings function:
You might know that Zopa is a little unusual amongst the now 30+ peer-to-peer lending companies running worldwide in that we facilitate the vast majority of loans through the Zopa Markets; almost all the other peer-to-peer lenders make all their loans using something more like our Listings. Indeed, we weren’t first-to-market with the Listings approach, adding them to our site about two and a half years after we first launched. Since then some 700 Zopa borrowers have received loans totaling £4.3m using Zopa Listings and there’s been some great ones in there; from guitar re-stringing, to a planetarium, a few bits of plastic surgery and of course plenty of cars.
Sadly though, while those figures sound quite good, they only represent a very small proportion of total Zopa lending and that proportion is declining too, while the rest of our business is growing rapidly. Couple that with Listings being much more long-winded to underwrite and we hope you’ll understand why we’ve taken the tough decision to draw Zopa Listings to a close.
… we’ll remove the functionality from the site that allows borrowers to create a new Listing. All the Listings that are already live before this point will of course be allowed to continue to their natural conclusion and once they’re all finalized, we’ll remove all references to Listings from the site.
If you’ve taken part in any lending via Listings, you’ll still be able to keep track of them and monitor how they’re being repaid in My Loan Book, where you can now find a link to your borrower’s original Listing page in the detail page of the loan in My Loan Book (click on the borrower’s username to open this view).
Ever wondered how p2p lending is regulated in the US in detail? The new GAO report ‘Person-To-Person Lending: New Regulatory Challenges Could Emerge as the Industry Grows‘ has all the details and covers the situation of Prosper, Lending Club and Kiva. It also reviews possible regulatory changes.
Peter in an article over at SocialLendingNet has collected some interesting statements showing that Lending Club is close to be able reaching break even on cash flow terms.
Renauld Laplanche told him, that Lending Club has topped 1 million US$ monthly revenue and could thereby cover it’s operating expenses, if investments in the future (technology, marketing) are disregarded.
Lending Club is the second major p2p lending service after Zopa to approach break even.
Lending Club is still a long way from making profit as it has a long way to go to redeem the money invested in the platform over the past years. But the growing volume and the ability to cover expenses a very good signs that p2p lending services can scale to profitability.
