Do not use second loan to pay off first

wiseclerk 1 Comment

Prosper.com recently allowed borrowers to take out a second loan while the first is still active.

Now Prosper changed the Borrower's Agreement and included the following rule: "You may not obtain a Loan from the Prosper marketplace to pay off an existing Prosper Loan."

The discussion on this change is lively, with many lenders wondering about the reason behind this and how Prosper will enforce this rule. Prosper allows prepayments with no penalty. How will Prosper know where the money for the repayment came from?

A possibility is that Prosper added this clause to benefit from servicing fees longer.

MyC4 adds Kenya

wiseclerk 2 Comments

Today the first loan application of a borrower from Kenya was uploaded at MyC4.com. Rose Njeri runs a toys and decoration shop and wants a 2000 Euro loan to buy more products in Dubai. The loan term is 9 months, the maximum wanted interest rate is 15.5% (but currently loans at MyC4 all close at lower lender interest rates). Kenya is the third country MyC4 services after Uganda and Ivory Coast. The local partner (provider) in Kenya is Growth Africa.

First law amendment in reaction to peer to peer lending?

wiseclerk

The Netherlands will possibly be the first country where a law will be changed in reaction to peer to peer lending. Peer to peer lending in all countries is regulated by national laws but so far these did apply to all financial institutions and did not have specific provisions for peer to peer lending.

Dutch treasury secretary Bos says he sees the need to amend existing laws. In the Netherlands there have been parliament debates and regulation hassles triggered by the launch of p2p lending service Boober.nl in February 2007.

(Sources: 1, 2)

Watch a very interesting MyC4 video

wiseclerk

13 minute video (careful the video is >300 MB, requires fast internet connection) on MyC4. MyC4 facilitates peer to peer microloans to African entrepreneurs.

The video shows the situation in Uganda and many borrowers who talk about their plans. During an audience the founder gets praise by the wife of the president of Uganda for the concept.

Highly recommended viewing.

More Globefunder details

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Globefunder is (still) announcing to launch its peer-to-peer lending service soon.

To keep you occupied reading while waiting, P2P-banking.com has gathered some tidbits of information on Globefunder (US launch):

  • Maximum loan amount will be 25000 US$
  • Minimum credit score for applying borrowers will be 640
  • Globefunder will use data of Experian, CSC and eDominate to screen borrowers