How Bad Customer Service can Backfire

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In the age of the internet bad customer service can not only scare away the harmed customer – he can retaliate by appealing to the masses and unleashing a viral protest song.

This video was viewed 2.4 million times. I bet United Airlines badly regrets the events by now and wish the could turn back the clock.

While this is completly unrelated to p2p lending similar things could happen, if a lender or a borrower feels he did not receive appropriate service. With Twitter, Youtube and blogs word can be spread fast.

P2P Lending Service People Capital Gets More Funding

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People Capital, a p2p lending service for college students to obtain student loans via an online lending exchange, announced that it has closed a 500,000 US$ round of Series B funding. The Serious Change fund, helmed by investor Josh Mailman, led the round of financing. People Capital will use the funding to accelerate technological development of its peer-to-peer lending platform which will offer a unique solution for students to finance their college educations. This platform is poised to provide funding for students in the fall 2009-10 academic year. “We are delighted to welcome Serious Change as our new financial partner,” said Tom Shelton, CEO of People Capital. “With this financial commitment, we will continue to develop our proprietary lending technology which, when launched, will help students receive more favorable private student loans for high education needs.” “Although peer-to-peer lending technology is not new, we had been looking for a company that could bring the technology to the next level, one that offers a responsible alternative to students wishing to take out loans for college,” said Josh Mailman, head of Serious Change. “After extensive research, seeing the technology in action, and meeting company executives in person, we became convinced that People Capital presents by far the most exciting opportunity of companies in the peer-to-peer lending space.

(Source: press release)

Zopa Partnerships Bring in New P2P Lending Borrowers

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British p2p lending company Zopa has recently entered two partnerships.

Zopa Prime

Zopa partners with the Charity PRIME to offer loans to entrepreneurs over 50 starting or running a business. The loan is not a loan to the business but a personal loan of up to 15,000 GBP (approx 24,125 US$). PRIME is the Prince’s Initiative for Mature Enterprise. The charity’s role is to vet the business plan of the applicant.

Lenders benefit because all Zopa prime loan listings are 50% guaranteed by PRIME. More details on how to obtain a loan.

Zopa and Good Energy

Zopa also partnered with Good Energy, a 100% renewable electricity supplier. Customers of Good Energy can use a Zopa loan listing to fund the initial installation cost of solar panels or wind turbines. In this partnership Zopa uses affiliate links with a branded landing page:
http://www.goodenergy.co.uk/affiliates/zopa

Benefits for Zopa from the partnerships are:

  1. More borrowers
  2. More quality without more costs – borrowers are vetted/screened by partners
  3. 50% of loan amount secured for PRIME loans
  4. Possibly earning referral fees from the affiliate link to Good Energy
  5. Great story for press coverage and marketing (catchwords:  “Prince Charles”, “renewable energy”, “credit crunch”, “older age”, …)

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Interest Free Loan

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The borrower who receives the 10,000th loan from Zopa UK will be lucky – it will be an interest free loan.

Furthermore Zopa has a referral promotion in July. Zopa pays 100 GBP (approx. 165 US$) to members that refer a borrower who successfully gets a loan in July.

Smava Funds More Than 1M Euro Loans in June

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P2p lending site Smava.de for the first time reached more than 1 million Euro (approx. 1.4 million US$) loan volume funded in one month. One factor contributing to this is that Smava is in the top 10 rankings for German Google search results for the keywords kredit (engl. loan) and kredite (engl. loans) since the end of May. I find it interesting that there is not one single bank site in the top ten for these search results.

Furthermore Smava profited form TV exposure, which also helped its competitor Auxmoney to achieve a record month with approx. 130,000 Euro loan volume.

In international comparison by p2p lending loan volume funded per month, Smava is in the top 5 behind Virgin Money, Kiva, Zopa UK and Lending Club.


(Source: Smava p2p lending stats; A-H are credit grades)