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)

MYC4 to Change Structure of Borrower’s Fees

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MYC4 will change its fee structure for borrowers for new loans starting in July. One main point of criticism had been that MYC4 by charging origination fees profited from any loan, regardless whether it was paid back or defaulted.

MYC4 has reacted. In future there will be no origination fees and only fees on the interest of the repayments. This uis a step in the right direction as the interests of MYC4 are now more aligned with the interests of the lenders. To make or increase profit MYC4 has to avoid and decrease defaults.

Quote of the announcement:

We have made a strategic decision with regards to the way MYC4 earns money by removing “closing fees” and only charging “interest fees” on the loans, when they are being repaid. That means that we put ourselves on the same side as the Investors on MYC4 only earning money when the Borrowers repay their loans.

With this change we want to signal that we believe strongly in the viability of the Businesses, and to align MYC4 earning with the earning of the investors and similar to investors be affected by any defaults and currency fluctuation.

Concretely, MYC4 will change the current income structure, where the Borrower is charged a flat fee of 2% of the loan amount, payable only when the loan is actually disbursed, and an additional fee of 2% (interest spread) when the loan is repaid on the basis of a declining balance. This corresponds to a total fee to MYC4 of approx. 3 percent of the total loan amount.

Instead, we will charge 6% interest commission. Considering a 12-month loan time, this 6% charge matches the 2% on initial balance plus the 2% on outstanding balance fees. The change will in most cases be neutral for the borrower.

In the same line, MYC4 encourages our Partners to shift their income from closing fees to repayment (interest) fees to show their belief in the quality of their portfolio towards investors. However, our Partners are not obligated to change their income structure, so it is up to each of them if and when they will change due to for instance their cash-flow situation.

Peer to Peer Lending Jobs

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Today I have added the new ‘Peer to Peer Lending Jobs‘ section and started it with listing the current 4 positions startup Loanio wants to fill in Nanuet, NY.

As P2P Lending is a very new and emerging field there are very few experts who have gathered previous practical experience in this field and these are highly sought after. One example is Arkadiusz Hajduk, who founded Fairrates in Denmark, then worked for IOU Central in Canada and now works at Smava.pl in Poland. Continue reading →