Zopa is the first p2p lending marketplace to run a hackathon called Zopathon. Participants a challenged to code something ‘that makes interest rates more interesting’. I have seen several hackathons in the fintech space but usually they are organized by banks, service providers or accelerators and none were p2p lending specific. Zopa says they will introduce APIs, that can be used in the 24 hour event. Sign up for participants is here.
Today Lending Club has unveiled a new product offer. Borrowers in California will be able to refinance auto loans through Lending Club. Lending Club says that the opportunity is huge with currently more than 1 trillion US$ in auto debt outstanding, while just a fraction of that – 40 billion US$ – refinanced annually. The company states this represents huge potential for both Lending Club’s platform and the millions of Americans who could save by refinancing into a more affordable product. Lending Club estimates the average APR for borrowers on new loans through Lending Club will be about 1-3% lower than their current loan, translating into an average savings of up to 1,350 US$ over the life of the loan.
“Tens of millions of Americans borrow over half a trillion dollars every year to buy cars. The practices and processes of the auto lending industry offer consumers limited options and a lack of transparency. This has created a gap between the rates consumers pay and the rates they might otherwise qualify for, unnecessarily driving up debt burdens,” said Scott Sanborn, Lending Club’s President and Chief Executive Officer. “We are excited to leverage our technology and core capabilities to put thousands of dollars back in consumers’ pockets.”. “This is Lending Club’s first offering of access to a secured loan with an overall risk and return profile that’s complementary to the unsecured loans available through our platform. It’s a big step in the evolution of our platform, a win for consumers, and will give our investors access to another proven asset,” Sanborn said.
Loans will be for amounts from 5K to 50K US$ with terms of 24 to 72 months and APRs ranging from 2.49% to 19.99%.
Lending Club strives to offer a much simpler application process than competitors. While the loans are initially limited to borrowers in California it seems likely that Lending Club will expand that. An article with more details is on Lendacademy.
German credit broker Smava today announced that it has closed a 34 million US$ investment which was led by growth investor Runa Capital, with additional participation from Verdane Capital and mojo.capital. Runa Capital is a venture capital firm with other investments in Zopa, Lendingrobot and Lendio. Verdane Capital is a Scandinavian private equity firm. Existing investors including Earlybird Venture Capital also participated in the investment. This series C round follows the previous round in 2015 which was 16 million US$. In total Smava, which launched in 2007, has raised about 64 million US$ so far.
Smava wants to use the funding to expand the customer base, hire additional talent and continue enhancing our scoring technology according to CEO Alexander Artopé.
Smava connects private borrowers with a broad selection of banks and private investors on its marketplace. Smava offers personal loans ranging from 1,000 to 120,000 Euros. Continue reading
P2P lending marketplace Prosper today informed investors via email, that it will close down the secondary market, effective October 27th. Prosper does not operate the secondary market itself, but uses FolioFn, operated and maintained by FOLIOfn Investments, Inc., a registered broker-dealer.
The announcement email reads:
A Message from Prosper and Folio Investing
Dear …,
We are writing to let you know that as of October 27, 2016, Prosper will no longer offer the Folio Investing Note Trader platform, the secondary market for Prosper Notes. Prosper has found over time that very few investors are using the secondary market and, as such, has made the decision to no longer offer this service. We apologize for any inconvenience that this causes. Prosper remains committed to its retail investor clients and to providing them a great experience.
Here’s what this means for you: The secondary market trading service will be available as normal until end of day (5:30 pm PST) October 19, 2016. After that time, any new orders to list Notes for sale will not have sufficient time to be completed and processed before the site becomes unavailable to users at the end of day (5:30 pm PST) on October 27, 2016.
Once the secondary market trading service is terminated, you will not be able to sell Notes that you own, and you will need to hold them to maturity.
If you have questions about your Notes or the wind-down of the Folio Investing Note Trader platform, please contact Prosper customer service at 877-611-8797.
Thank you.
Prosper and Folio Investing
Prosper has not disclosed usage numbers of the secondary market in the past, but volume traded is perceived to be low and this is also stated in the email. One speculation is that Prosper decided to close the secondary market to cut costs.
My feeling is that this will deliver a blow to the attractiveness of the Prosper marketplace for retail investors. Even if many investors have choosen not to use the marketplace (which several report does not have a very good user interface) the fact that there is a marketplace delivered some assurance that they could exit at least a larger portion of their portfolios should the need for liquidity arise. Also a one month notice seems to me rather short, given that loans can run up to 60 months and with the changed perception the prices could sink (lower markups, higher discounts) in the remaining month of trading as the number of investors wishing to use this last chance to sell will rise in my view, while the number of investors buying will at best stay stable. Continue reading
UK app Pariti has integrated loan offers by p2p lending marketplace Zopa into its app allowing users to check whether they could get a better rate for their debt. User can apply for a debt consolidation loan directly from the app. Pariti is using Zopa’s API to access data for the offers.
The Pariti app, which claims 70,000 users, connects to a user’s existing bank accounts, analyses their spending history, and helps them set a target for improvement.
The Zopa integration enables Pariti users to discover if they could be paying less for their debt without affecting their credit score, and to apply directly for a consolidation loan through the Pariti app.
“UK consumers are getting ripped off by credit card companiesâ€, Pariti founder Matt Ford comments. “Introductory offers, confusing fees, and unsuitable products have meant that people are paying far too much to borrow, and are getting stuck in high-cost debt. The product integration with Zopa allows us to proactively help reduce their cost of borrowing and pay off debt faster.â€.
Zopa’s CEO, Jaidev Janardana, says: “The API is already being used in online retail, and the implementation of our Pariti partnership marks its first use in a fully integrated, in-app application process. He added: “Our own research shows that many consumers could save money by swapping out expensive credit card debt for a lower-priced Zopa loan, and by working with Pariti we are able to offer this service to even more consumers.â€
Lending Club today published the results for the 2nd quarter.
(Source: Lending Club)