Regulation is an often met obstacle to p2p lending. This time Friendsclear in France is affected and has announced a temporary stop to new loan funding. The Banque de France has requested changes in the operating procedures that Friendsclear and its banking partner Crédit Agricole use.
Friendsclear expects the suspension of funding of new loans to last at least one month. Servicing of loans already funded in the past is unaffected.
British Fundingcircle.com has announced the closing of £2.5m of Series A financing from Index Ventures, co-investors and existing shareholders.
Since Funding Circle launched in August 2010, more than 4,000 businesses and savers have signed up, with 11.5 million GBP offered to businesses to date. Currently, lenders have collectively earned 120,000 GBP in interest with average yields of 8.3% with access to their funds through Funding Circle’s secondary market. fee from lenders and 2% fee from borrowers. Yield is calculated before fees, tax deductions and bad debt. To date, no businesses have defaulted on loans and therefore no bad debt has been incurred by any lender.
Samir Desai, co-founder of Funding Circle, said: “We are delighted to welcome such a prominent and well respected investor as Index Ventures as a shareholder in Funding Circle.â€
It was only a matter of time, that the p2p concept would be applied zo the insurance sector. Friendsurance does just that. You invite your friends and relatives, and they agree to cover part of the damage. In exchange Friedsurance claims that you can save up to 50-70% of the insurance costs.
At the moment Friendsurance offers general liability insurance, household contents insurance, legal expenses insurance and and cycle insurance.
How does this p2p insurance work?
Each of the invited friends will have to contribute 20 EUR in case an insured damage occurs. The remainder of the damage amount is covered by a conventional insurance.
Friendsurance says the costs savings are substantial since the concept:
I am sceptical about the concept for two reasons:
But I’m willing to be proven wrong and will take another look in a year or 2 to see how Friendsurance develops.
CARE International UK runs the p2p microfinance platform Lendwithcare.org. For a minimum investment of 15 GBP anybody can help funding a loan to entrepreneurs in Africa or Asia.
Lendwithcare has partnered with local MFIs in Benin, Togo, Philippines, Cambodia and Indonesia that disburse the loan to the borrower. Lenders do not receive interest. Aside from the default risk (Lendwithcare claims less than 2% bad debt) lenders also bear the currency exchange rate risk. Lenders do fill their account via Paypal or credit card, withdrawels are through Paypal.
Though the concept closely resembles Kiva’s, it is interesting to see the approach used by a long-time established aid and development organisation. The site shows the experience CARE has with marketing and fundraising. It looks much more flashy (at least compared to the old Kiva page).
Lendwithcare was launched in April 2010. Since then 243 loans were funded. At the moment there are about 32 loan request by entrepreneurs listed.
Two weeks ago Inuka.org launched into public beta. Inuka’s initial focus will begin in East Africa, where it has partnered with several microfinance Institutions that will be responsible for sourcing loans, uploading them on Inuka’s online portal, performing credit reviews on potential borrowers and collecting repayments. Inuka has selected two microfinance partners in East Africa after a detailed on-site due diligence process.
Lenders do not earn interest on loans financed. Asked what differentiates Inuka from other p2p microfinance services like Kiva, Babyloan or MYC4, founder Kanini Mutooni told P2P-Banking.com:
– We only lend to female entrepreneurs in sub-saharan Africa which means were very much focused on a niche sector rather than just lending to anyone
– Our loans are interest free which means that there is more of a philanthropic social element in lending as opposed to MYC4…
When I looked today, there were 11 loan request from Kenya online.
Although women play a major role in the economic development of emerging economies, they have the least access to capital and credit compared to their male counterparts. Giving more credit to women has been mooted as one of the fastest ways to reduce poverty in emerging economies. The virtues of female entrepreneurship have been extolled over the last few years although a lot still needs to be done to make this a reality: without capital or credit entrepreneurship is hardly possible so this means that solutions need to be found that enhance this capacity rather than talk about it and do nothing about it.
Crowd funding is definitely one of the solutions that could be put forward that could increase the likelihood of increasing available capital to women. Crowd funding in this sense refers to the process of providing small loans to female owned businesses which enables them to expand and grow their businesses. This also means that they reinvest the proceeds of their business into the nutrition and education of their families which results in an increase in the quality of life of their society and community. This correlation has been supported by evidence from the World Bank and IFC stating that women reinvest 90% of their profits in the home whilst mean reinvest only 60-70%. Continue reading