Prosper.com, which is still in quiet period and not allowing new loans, made a new SEC filing yesterday. In this third amendment to the S-1 filing makes several amendments, most notably introducing securitization for initial offerings of loans.
Prosper plans “Open market loans”, which apparently are loans issued by traditional lenders which being securitized and resold to Prosper lenders. I am somewhat sceptical how many Prosper lenders will like the “open market loans” offer. To me this seems a far excursion from the peer to peer lending idea.
In the filing Prosper states that FolioFn will be the operator of the Prosper secondary market (named “Folio Investing Note Trader Platform”). FolioFn already operates the Note Trading Platform of Lending Club.
More changes in the new filing are in a review in this blog post at P2PLendingNews.
Maneo introduces guaranteed p2p lending in Japan. On the new “G-Loan” the lender does not need to worry any more about defaults. Minimum investment is only 10,000 JPY (approx. 100 US$). The loans are guaranteed by Orix Credit Corporation which entered into a partnership with Maneo.
The downside is that on “G-Loans” the lender only receives 1.5% interest.
The borrower pays a fixed interest rate, which is set depending on his credit grade:
Borrowers now have the option of selecting a standard loan or a G-Loan. Selecting maneo’s standard loan gives borrowers the opportunity to lower their interest expense if sufficient lenders bid on their loans. In contrast, interest rates on G-Loans are fixed at 7.0%, 8.0%, 9.5%, 11.0% and 12.0% depending on the borrower’s credit rating. According to Tadatoshi Senoo, CEO of maneo, “We believe borrowers who select G-Loans will have an easier time attracting funds from lenders thanks to the guaranty by Orix Credit, and that the liquidity of maneo’s online social lending marketplace will increase significantly as a result, making borrowing at maneo even more attractive.”
In my view the choice whether it is a guaranteed loan or not should not be the borrower’s, but only for the lender to choose when bidding.
With an interest rate of only 1.5% the only merit of this model for lenders is that he can not lose money when bidding on a guaranteed loan.
Lending Club reintroduces the possibility for everyone to download the data of the loans as .csv or .xml file. This feature was temporarily removed in March due to privacy concerns. Lending Club says a few data points that compromised borrowers identity have been removed.
Aqush.jp has launched Aqush Tomo, a p2p lending service to facilitate loans between friends and family members. Aqush is a service of Exchange Corporation K.K., which states it’s mission as “… to leverage innovation and international best practices to pioneer ‘Social’ financial services in Asia. Our goal is to bring transparency and choice to markets and assets that previously were illiquid, opaque and tightly controlled, by empowering people to legally and securely deal directly with each other.”
Aqush offers a framework that helps borrower and lender in creating loan documentation and repayment plans.
Features of the “Basic Service” are
Creation of promissory notes and repayment schedules
Interest rates mutually agreed between borrower and lender
Three types of repayment supported – Amortized, Interest Only and Fixed Payment with Balloon.
Repayment management and tracking using online tools, document backup and email-remainders
The fee for the “Basic Service” is 8,800 Yen (approx. 88 US$)
The “Plus Service” adds additional features:
Professional review by Aqush staff
Repayment processing – payments are made and tracked through an Aqush account
Annual reporting
The “Plus Service” is priced at about double the “Basic service” plus a small fee for handling each repayment.
Russell Cummer, Executive Director told P2P-Banking.com:
AQUSH TOMO, is a Family and Friends loan documentation and management service …. We are the first service of this kind in Japan ….
We will also be launching a full-service P2P lending exchange, “AQUSH Market”, this summer to cover both the friends and family and true P2P aspects of social finance in Japan.
Aqush is an alternative spelling of the Japanese word for handshake, “Akushu”.
(Sources: forum post, press release, company management)
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.
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.
