Trustbuddy AB has acquired the operations of Swedish p2p lending site Loanland effective November 19th. This means that Loanland will not close as reported earlier. Trustbuddy AB is a Swedish company with Norwegian origins. Trustbuddy will continue operations and in mid-term plans to integrate the activities of the service into their own platform. Loanland users were informed that the transfer of the membership agreements does not change anything for them.
One of the disadvantages for lenders in many p2p lending markets is that money lent cannot be withdrawn early during loan terms.
Zopa UK now introduces a secondary market called ‘Rapid Returns’, which allows lenders to cash out on all or selected market loans early. To do this a lender simply selects all or specific markets to ‘sell’ his loans.
For each of these loans, the system looks for other lenders offering to the same market at the same or a lower interest rate. Where a match can be found, each loan is then permanently transferred to the lowest bidding lender in that market. The winning lender will then earn the interest rate that the previous lender was getting on that loan, even if they offered at a lower rate. The lender receives the total outstanding capital on the loan from the offered funds of the winning lender.
Zopa deducts a 1% admin fee from the transferred capital.
There are some limitations: Loans made through ‘Zopa Listings’ are not eligible. Also excluded are loans where the borrower ever has missed a repayment. Some more restrictions apply.
And of course there needs to be a matching lender offer with a rate low enough.
Asked why lenders can not bid on loans on offer – thereby buying at a discount or premium – a Zopa employee explains: “What you describe here is a true secondary market which …, we are not regulated to provide. I hope all will become clear when the full functionality is available in the next couple of weeks.
Our overarching rule when developing Rapid Return has been that it should allow lenders who want to exit some of their cash to do that. It is not designed to tinker with a loan book – in particular we wanted to avoid a scenario in which an experienced lender could cash out of some loans at the expense of an inexperienced lender. As a final note on the ‘never missed a repayment rule’ – we started development with this rule as ‘not currently in arrears and hasn’t missed a repayment in the least three months’ but when we looked at the proportion of the total loan book for each, there’s a negligible difference. It’s therefore much clearer and fairer to go with the former.”
Currently Rapid Returns is only collecting offers on the buying lender’s side, letting lenders amend their bid offers to include Rapid Return loans. The feature will actually go live in a couple of weeks. Then selling lenders can mark their loan books for sale.
I expect that the Rapid Returns feature will further boost Zopa’s growth in the British market. Congratulations.
Smava in the time from September, 15th 2010 to October, 15th 2010 offered subsidized loans to new customers (borrowers). The offer was limited to loan amounts up to 2,500 Euro and only available for 36 months loan terms.
Eligible borrowers could take out a loan at an APR of 2.99%. Since lenders received “normal” rates (typically between 5 and 13% nominal depending on credit grades) Smava subsidizes the difference. Over the duration of 36 months this will cost Smava about 150 to 300 Euro per loan.
According to Wiseclerk stats about 150 loans with a total volume of 350,000 Euro closed at the reduced rate.
Reasons for this marketing promo
Smava did not comment about the motives behind this offer. While the resulting CPO of this offer is higher then with other marketing channels, Smava could have speculated that the press picks the special offer and that the traffic from the generated press coverage leads to additional loan requests that are not eligible for the offer. Furthermore the rate of 2.99% APR could place Smava prominently ranked on loan price comparison sites.
Results
In my opinion this offer had low success. Judging by economic facts it might be considered a failure. Little additional press coverage was generated by this special offer. The total loan volume funded per month did not rise compared to previous months. The offer might aid the positive image of the Smava brand though.
