MyC4 introduces automatic bidding

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MyC4 introduced "automatic bidding", an automatic bidding assistant that will bid on any new loan listings that match parameters set by the lender. Similar to the Standing Orders feature of Prosper.com, but not with as many selection criteria.
Mads Kjaer, CEO of MyC4, said:

The Auto Bid request came from several of the businesses we have talked with and also several Builders who asked for a quick way of get going.

You could say that this feature is also the preparation for e.g. philantrophy funds or bi-lateral organisations who want to use My4 to reach micro entrepeneurs in Africa at NO COST = 100.000 credits is 100.000 credits invested …

MyC4 now also enables the use of Paypal to transfer money into the MyC4 account.

Myc4 automatic bidding

No more Prosper group fees

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Prosper.com announced that it will discontinue group fees in the near future for all new loans. Group fees, also called Group leader rewards or Group rewards allowed the group leader to charge a fee that is payed by borrowers with loans in this group.

The announcement:

At Prosper, we have been listening to your feedback regarding groups and group leader rewards.

The original philosophy behind Prosper Groups was to enable borrowers in close-knit communities to leverage the reputation and peer pressure of their group to attract more bids from lenders, resulting in potentially lower interest rates for borrowers, and lower default rates for lenders. We have found, after nearly two years of experience, that the strongest groups are comprised of close networks of friends and associates, where compensation is not the dominant motivation for the group leader’s services.

As a result, we are making changes to Prosper Groups. In the next month, Prosper will discontinue payment rewards on new loans for group leaders. Group leaders will continue to earn payment rewards on all eligible loans originating before the change. Group leaders can also receive referral rewards for referring borrowers or lenders to Prosper under our Referral Program.

We hope this change will encourage group leaders to grow their groups by inviting new members from their pre-existing social networks, turning Prosper Groups into a more powerful community development tool and making Prosper simpler for both borrowers and lenders.

For more details on these changes, please visit our Group Changes Frequently Asked Questions (FAQ).

Thank you for helping us become the Internet’s leading community lending site.

The original idea of the Prosper groups was, that social connections, that already existed offline, would be replicated within the Prosper group structure.
But most groups evolved online only with no previous offline connections between the members. The (the lack of) value of the groups for the Prosper concept has been discussed repeatedly in the Prosper forum. While some group leaders did a good job screening and vetting borrower applications and the group leader could be seen as a compensation for time invested; the majority of lenders seems to see the removal of group fees as a step in the right direction.

Comparing MyC4 to Prosper

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Researching the MyC4 concept (see previous post) there are some usability features that call for a comparision to Prosper.com:

  1. Auction: The model of Prosper seems much more straightforward to me then the auction model of MyC4. The possibility of bidding above the maximum interest rate as long as the weighted average interest is below it, gives it a major twist. Every lender on a loan ends up with a different interest rate while borrower nominal interest rate is the weighted average (mind-boggling, isn't it?). And the full transparency of all bids during bidding process is interesting.
  2. Usability, communication and transparency: The interface is designed for much interaction. Everywhere the user can post comments (to profiles, to blogs, to loans, to listings). And with a user added avatar on every comment, it is very personal. No anonymity since real names are used (not screen names). Anybody can view the loans other lenders are invested in. Users can add icons to their profile to show which motivation led them to MyC4 (be it profit, education, social lending, …) 
  3. Defaults. So far none, but naturally it is much to early to judge. Hopefully MyC4 will have defaults as low as Kiva and prove that third world borrowers are more reliable.

There will be continued coverage about my experiences at MyC4.

 

MyC4 – Microlending for profit to African entrepreneurs

wiseclerk 3 Comments

myc4 betaDanish startup C4 World on it's platform MyC4 allows lenders to finance micro loans to African entrepreneurs (Afripreneurs). P2P briefly featured the MyC4 plans earlier. The goal is to "eradict poverty through business". The service is currently in beta, but signing up and lending at MyC4 is already possible.

MyC4 differs in its approach from Kiva: At MyC4 lenders do earn interest on the loans. Currently interest rates of 20-24% are typical with loan terms of 6 or 12 month.

myc4

P2P-Banking.com joined the Beta as a MyC4 Builder. The gathered experiences are published in an exclusive P2P-Banking.com review of MyC4:
http://www.wiseclerk.com/myc4-p2p-banking-review.pdf (0,4 MB, 3 pages)