What is Pret d’Union about?

PRÊT D’UNION is the first and sole peer-to-peer lending platform accredited by the French Central Bank.

Thanks to an innovative disintermediation model, PRÊT D’UNION enables private individuals and institutional investors to lend money to borrowers directly through a secured bond marketplace, offering above-market returns on savings and low interest rates on consumer loans. Each party gets a better deal, bypassing mainstream financial institutions.

PRÊT D’UNION was founded in October 2009. In March 2011 the company obtained a broker license from the AMF (Autorité des Marchés Financiers – SEC equivalent); in July 2011 the company obtained a credit institution license from the French Central Bank. The marketing campaign has been launched in January 2012.

In 26 months the company has issued over €80 million in loans (€11 million in 2012, €43 million in 2013). For 2014, Pret d’Union plans to issue over €90 million in new loans.

Since its inception, PRÊT D’UNION has raised €18 million in equity. PRÊT D’UNION also enjoys the benefits of the French Research Tax Credit (CIR).

What are the three main advantages for lenders?

Pret d’Union propose 4 types of investment products:

- Fund #1 (Conservateur Court – Conservative & short duration) which invests in consumer credit with initial maturities of 2 years and 3 years granted to A Borrowers.

- Fund #2 (Conservateur Long – Conservative & long duration) which invests in consumer credit with initial maturities of 4 years and 5 years granted to A Borrowers.

- Fund #3 (Equilibré Court – Balanced & short duration) which invests in consumer credit with initial maturities of 2 years and 3 years granted to B Borrowers.

- Fund #4 (Equilibré Long – Balanced & long duration) which invests in consumer credit with initial maturities of 4 years and 5 years granted to B Borrowers.

The format of our funds is pretty similar to LC Advisors’ funds. However we added a few features: an ISIN code (FR0011605690 for Fund #2) and weekly quotes on Bloomberg (ticker PDUALNG:FP).

Yields for Lenders range from 4.4% p.a. to 7.4% p.a.

Chart 1: Purpose of loans (PU Conservateur Court)

What are the three main advantages for borrowers?

For Borrowers, the three main advantages are:

- better rates,

- fixed interest rates and constant monthly repayments (no revolving loans),

- A quicker process.

Which marketing channels do you use to attract lenders and borrowers? Can you share the current CPA?

To attract borrowers we mainly use: emailing, aggregators, banners, affiliates … (CPA below 200€ per borrower).

To attract Lenders, it’s mainly “word of mouth” and PR.

What was the greatest challenge for Pret d’Union in the past 12 months?

The greatest challenge in the past 12 months was to maintain an equilibrium between borrowers and lenders and to hire/structure a stellar team.

Chart 2: Regional distribution of loans (PU Conservateur Court)

Are there institutional investors lending at Pret d’Union? What role do you see them having on your platform in the future?

We do have a few small institutional investors lending at Pret d’Union – but as of today most of our lenders are retail investors (qualified investors), HNWI, Family Offices, Private Banks, Foundations, etc.

We target the following breakdown:

-          1/3: retail investors

-          1/3: HNWI, Family Offices and Private Banks

-          1/3: institutional investors

What new features/innovations do you plan in 2014? Is going international an option?

In 2014, we launched the Fund #3 and the Fund #4. By the end of the year we plan to invest a large chunk of money in R&D (big data, scoring & statistics, anti-fraud, etc.) Going international is an option we’re still assessing.

Where do you see Pret d’Union in 3 years? Is P2P Lending a threat to banks?

In three years we see Prêt d’Union with 1-2% market share in France and maybe with branches in Europe! P2P Lending is an alternative to banks (not a threat) – there are many types of partnerships that could be envisaged with banks.

P2P-Banking.com thanks Charles Egly for the interview.