MYC4 will cover for MISCOCI loans

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Acting on problems that came about when an insurance scheme, that was supposed to cover over 200 loans in Ivory Coast, failed (see previous coverage), MYC4.com announced it will reimburse all lenders on these loans, if the loans default.

Mads Kjaer, CEO of MYC4, announced:

We have in previous update informed that we will intervene and take on the obligation towards the Investors and cover defaults on loans. MYC4 will cover all defaults on MISCOCI covered loans. In actual numbers this could amount to a total cost of EUR 388,000. This will put financial strains on our company, yet we believe it’s the right thing to do.

Now, what does it mean that MYC4 covers MISCOCI included loans? As noted, 242 loans in Cote d’Ivoire were supposed to be covered by MISCOCI insurance. These 242 are very likely to default within the near future – some are already defaulted (cf. MYC4’s default policy) and therefore MYC4 will cover Investors’ loss on their principal.

This means covering the spread between what has already been paid back and Investor’s principal or in other words: MYC4 will step in to reimburse Investors whatever amount they still have not received of their original investment. Meaning the original bid value minus total received repayments over time. We are currently working how we technically can do this in the system and will revert back with an update in two weeks time.

Loans without MISCOCI:
With regards to the not MISCOCI-covered Cote d’Ivoire loans, we are aiming at a solution that will create the best possible chances for Investors to get some of their money back by ensuring that Notre Nation and Ivoire Credit will continue to collect repayments also after the technical default on the platform.

Lenders welcomed this decision in forum feedback.

Other MYC4 news:

  • MYC4 wins prize as “best financial e-commerce” by FDIH, the Danish Association of Internet and Distance Trade
  • The first bid by IFU and CSR was made on MYC4 in their aim to invest 2.2 million EUR on MYC4 (see earlier coverage)

Sobralaen renamed Isepankur

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Only 6 weeks after the launch, Estonian p2p lending service Sobralaen.ee was renamed into IsePankur.ee (translates to iBanker). The reasons were that “The previous name only represented one side of the business (borrowing) and [that] it had negative associations with payday loan companies who have destroyed the term ‘loan’ in Estonia over the past 2-3 years”, co-founder Pärtel Tomberg told P2P-Banking.com.

Since the launch 44 loans with a value of 81,200 EEK (approx. 7,000 US$) were founded. The current average interest rate is 25.3% which matches bank interest rates for similar loans.

Following requests by lenders, Isepankur allows borrowers to reveal their identity (full name and personal identity code) in their auctions. Clicking on the name or the identity code runs an automatic query at Google.

P2P Lending Service Ppdai growing in China

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The Chinese p2p lending service Ppdai.com announced that over 2.5 million RMB (approx. 365,000 US$) in loans were facilitated since it’s launch.

“We witnessed strong growth in 2008 and incredible growth in the first quarter of 2009. In less than one year we have achieved over 2 million RMB in loans with roughly half a million RMB in March 2009 alone. … . What we realized was that we were able to provide a solution that has gained popularity as the global credit crisis worsened and left many borrowers with little alternative for funding.” Said Jack Gu, PPDai’s CEO and Founder.

Being that China does not have a robust credit rating system for consumers, the company developed its own proprietary credit system to filter potentially good borrowers from bad borrowers. This system creates a unique profile for each borrower and leverages other Chinese platforms such as TaoBao to accurately project whether a borrower has the financial ability to pay back a loan. PPDai’s credit rating system has helped achieve loan default rates of less than 2% for 2008.

“PPDai’s core value is to create a well customized credit scoring system for Chinese borrowers,” said Tony Li, PPDai’s Director, “We believe that this is the main reason why investors have been willing to lend money to borrowers on the PPDai network.”

PPDai closed an initial round of financing from Essentia Equity in March 2008 and is about to raise an additional round in the third quarter of 2009.

“We were attracted to PPDai because it offers a unique opportunity to benefit from the extraordinary growth being witnessed in China,” said Roy Sebag, Managing Partner at Essentia Equity, “There are currently 298 million internet users in China and an offline non-banking lending market that is said to be in the range of over 1 Trillion RMB per annum.”

(Source: press release)

List of P2P Lending Forums

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Peer to peer lending is innovative and new. New users usually have lots of questions when grasping the marketplace mechanisms. Beyond the FAQ of the p2p lending service, a great place to learn is usually a forum, where users (mostly lenders) exchange experiences and post and answer questions.

There are “official” forums provided by the lending services and independent ones. One of the first ones, the official Prosper forum, became one of the most notorious ones. After Prosper “moderated” negative and critical posts it later deleted the initial forum in total. When a copied version of the forum’s archive was made available on seperate internet site Prosper tried to  shut the site down, but failed.

But this is an extreme example. I found that on nearly all other forums a very helpful and supportive attitude rules.

List of p2p lending forums

General

Focus on one p2p lending service

If I have missed any great p2p lending forum, please comment with the URL and I will add it to the above list. Thank you.

(Photo credit: wili_hybrid)

Dutch P2P Lending Site Boober Fails

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In the Netherlands p2p lending service Boober apparently has ceased operations. The website Boober.nl has been inaccessible for days and no one was available for comment as the phone went unanswered.

There are reports by lenders, who complain that loans are not serviced as usual. Even one borrower is seeking help, because he cannot get the monthly payment through to Boober.

As of the moment it was not possible to determine how outstanding loans will be dealt with.

Lend4Health

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Inspired by Kiva.org, Tori Tuncan set up a non-profit peer to peer lending for alternative treatments of autistic childs. Functioning on a blog and by using Paypal for payments, Lend4Health facilitated more then 30 loans so far. Loan requests are described online, lenders can contributed via ChipIn widgets (Paypal based) and Tori Tuncan posts updates on the progress and how the loan was used.

Companies can help Lend4Health by sponsoring the Paypal fees.

From the site:

What Is “Lend 4 Health”
Lend4Health facilitates community-based, interest-free “micro-loans” as a creative funding option for individuals seeking optimal health.

Currently, Lend4Health is facilitating loans for the biomedical treatment of children and adults with autism spectrum disorders. Other health issues may be included on Lend4Health in the future.