P2P-Banking

Why Friendsclear Closed

Friendsclear, a french p2p lending service, has been operating for more than 3 years. When I learned in the end of May that the company is closing down, I contacted the founders to find out why. Nicolas Guillaume, co-founder of Friendsclear, told P2P-Banking.com:

The key points are the following:
– We have been in a quiet period following french regulator’s remarks for about 8 month (april to dec 2012) and we relaunched our platform in a new model compliant with regulator’s remarks in december 2012
– Regulator’s remarks were mainly on a better risk management for client and the capacity for the bank to refuse any loan without explication (“discretionary”)
– We modified our crowdfunding model with a project mitigation model and a guarantee in capital by our banking partner (Credit Agricole)
– We had a very progressive and slow restart due to extended legal process with our banking partner (regulator’s remarks made them very meticulous)
– We considered regulator’s remarks as non legaly based  but our banking partner was not ready to discuss with the regulator.
– French regulator has published a guide for crowdfunding not friendly with crowdfunding platform and has received complaints about (money collect need a emoney licence, equity need an extensive broker licence,…)
Regulation is planned to be changed in September 2013
– With capital guarantee by our banking partner we had 2 selection processes, one by internauts and the other through traditional banking process. Theses 2 processes were divergent in criteria, timing and objectives and resulted in a very weak pipe channel.
– Althought diagnostic was clear, we took time to give up and convince all our stackholders and partner to stop.
For more details I recommend Nicolas’ blog post (original in french; english by Google translate)
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