Guest article, by Ivan Mantelli, Director Lending Hub 

Lending Hub is a p2p lending and borrowing platform for small to mid-sized personal loans with a core focus upon developing the site around communities, groups, friends and networks. The objective of the Lending Hub platform is to match individuals with surplus funds who are not active lenders with ordinary people who need funds. The site will be driven by the decisions of the users rather than a collective investment scheme (such as Zopa's initial model).

Lending Hub is a private Australian company based in Sydney. I am the Managing Director and have a varied background in SME management, investment banking and corporate strategy. My first venture was an education business which I started whilst completing a Bachelor of Science in Pharmacology at the University of NSW, following 4 years of growth I sold the education business and studied corporate finance with a Master of Finance at the University of Technology Sydney and quickly moved into investment banking gaining experience in corporate takeovers and mergers at the height of the private equity boom in Australia. My latest role includes strategy and planning for a large digital media company. Our other shareholders all have a hands-on role and bring additional experience in transactional banking, capital raising and project management.

The expected launch date is early 2008 and the market strategy will be to focus upon key categories of borrowers with decent credit ratings that fall just outside of the attention of the big five banks which in Australia are traditionally focused upon a small subset of the borrowing population and offer a product that is not tailored to individual depositors or borrowers. Initially social lending sites will attract a large number of these customers that are not well served by the major institutions and then over time the social lending platforms will begin to attract mainstream customers as this form of borrowing (and lending) becomes more commonplace.

Our major milestones will initially be site development and rolling out a number of user features to build a solid base of tools and to make the user experience extremely friendly and useful to them. At this stage we will focus upon the Australian market which generates at least AU$80 billion a year in personal loans (Australian Bureau of Statistics) rather than looking to other markets which have different regularity systems and also different consumer preferences and needs.

The Australian market is likely to have a handful of hopeful peer to peer lending entrants in 2008 including iGrin and Peermint and potentially other larger sites. The Australian market has a number of unique features that differentiate it from say the US in that consumers are quite conservative and there is a much slower uptake of digital services. The successful p2p platforms will ultimately be those that connect with the Australian consumer and develop a business model and service that reflects the needs and expectations of the target Australian lender and borrower. iGrin currently is an offline model and it will be awhile before it can be considered an online p2p service and our objective is to be Australia's first online p2p loan platform. Peermint has a multi-market strategy which is ambitious and yet to be proven given that the largest p2p players in the UK and US have focused on developing the home market first.

My expectation is that in 2-3 years time, based on the behaviour of other online verticals in Australia, that we will see two quite differentiated P2P platforms with significant market share and potentially 1-2 other smaller players catering for niche segments of the online loan market.