That’s the name of a microlending platform, where lenders can lend to palestinian entrepreneurs in the Palestinean territories. I have not used Lendforpeace.org, but from what I read, it works just like Kiva but targets a specific region. Lendforpeace launched 5 days ago. When I looked today there where 8 loan requests in various degrees of funding.
Lendforpeace is a US non-profit organisation founded by 2 Jews and 2 Palestinians: Sam Adelsberg, Andrew Dudum, David Fraga and Al Taj.
Our mission is to use micro-lending to promote economic opportunity and political stability in the Middle East.
At LendforPeace.org you can make a loan directly to a vetted micro-entrepreneur in the West Bank. We work with US government-approved microfinance institutions on the ground to deliver your capital along with training and guidance to low-income individuals who are interested in starting or expanding their own small businesses.
LendforPeace.org is supported by grants from the Clinton Global Initiative, Ashoka Youth Venture, Davis Projects for Peace.
For users with a specific interest in this region Lendforpeace may be an interesting supplement to using Kiva.
The new p2p lending service PertuityDirect.com is now online. The concept Pertuity Direct uses is new. Lenders pay into the “National Retail Fund” which is a “social lending mutual fund”.
If I understand the concept correctly, you do not choose individual borrowers you want to lend to, but rather a group of borrowers with similar parameters by buying share of a fund – but if you want to, there is the option for individual selection (similar to Lending Club). Have not grasped yet how the individual selection is supposed to work when you by shares of the fund? The initial minimum investment amount is 1,000 US$ per lender.
A so far unheard feature is that it Pertuity Direct allows early withdrawel of funds by lenders (2% withdrawal fee for withdrawals in first year of investment). Another new feature I found while reading the multiple page fund prospectus, is that lenders can set up an automatic investment plan, making monthly or quarterly investments.
Interest rates of the loans are set in the range from 8.9% to 17.9%. Pertuity Direct accepts only borrowers with a FICO credit score of 660 or higher. Update: In fact the prospectus of the National Retail Fund II states that Pertuity will invest over 80% of the money in loans whose borrower’s have a credit score of at least 720.
One advantage for borrowers is that – if approved – they get the loan faster than on other p2p lending sites, since there is no bidding or auction just the evaluation and approval process. Pertuity claims that typically borrowers will receive the money within 2 – 3 business days.
Borrower Fees
1-2% closing fee (depending on credit score) $15 failed payment fee $15 late payment fee (on average, may be slightly lower/higher in some states) 1% Electronic Funds Transfer discount
Lender Fees
Currently, the first year expense estimate is 3.17%, or $32 a year for every $1,000 invested. Fees are estimated based on the aggregate size of the fund.
This estimate assumes a monthly average fund size of $12 million during the first year.
While I browse the site for more information, in the meantime check out CEO Kim Muhato’s post on the blog. Excerpt:
Pertuity Direct’s Social Lending Network is different from anything else in the market. The social lending networks we are building will expand to specific affinity groups borrowing from and lending to each other; for example, professional associations like doctors and firefighters, small business owners in specific geographic regions, and university alumni groups etc. We call it Mutually Responsible Banking. Learn more about Pertuity Direct’s Social Lending Network here.
Our team is comprised of executives that have collectively worked in the U.S. financial services arena for a few decades with companies like Capital One, E*TRADE and PNC. We have executives who have experience building innovative and scalable web-based financial products, executives who have managed consumer credit and multi-million dollar loan portfolios, as well as brilliant engineers and systems architects. Our team is dedicated to changing the consumer finance landscape and loves to be on the cutting edge of financial innovation.
Following up on the interview (see ‘Smava expands p2p lending to Poland‘) I just took a look at Smava.pl, which has now launched. I don’t speak Polish but the layout of the site is very similar to the Smava Germany site, so navigation was no problem.
As expected interest rate levels in the Polish market are considerately higher then on Smava.de. At the moment there are 4 active listings with (nominal) interest rates ranging from 15.9 to 23.5% (maximum interest that can be entered in the application form for a loan is 26%). Loan terms are short. Borrowers can select from 3 months (minimum) to 36 months (maximum) with 9 possible durations.
Smava did keep the groups feature, which puzzles me as groups have not gained any use on the German version in the nearly 2 years since launch.
One of the partners of Smava in Poland is Money.pl, a finance website with 2.6 million users per month. This is a good marketing move to gain visibility for the concept and to close up on the 3 competitors that launched earlier.
The management team consists of PrzemysÅ‚aw MoÅ›cicki, dr Marcin Klinowski and Arkadiusz Hajduk. Hajduk is a ‘veteran’ in p2p lending. He co-funded Fairrates (in Denmark) and later was product manager on the IOU central team (Canada).
Here is what founders Casey Wilson and Courtney McColgan wrote about launching:
Dear Friends,
We are delighted to report that Wokai.org is now live! Just two years ago, we were students in Beijing, dreaming about starting a microfinance organization.
Now, thanks to our advisors, chapters, designers, donors, families, field partners, friends, interns, investment committee, lawyers, pilot participants, programmers, volunteers and so many more, this idea has transformed into a dynamic international organization with an amazing website, to empower people in China to lift themselves from poverty.
We needed you and you were there, and for this we can’t thank you enough. Over the next two years, 44OO families from all across rural China will receive loans through Wokai. These loans will enable people to start and grow businesses in their communities. With the proceeds, they will send their children to school, and invest in their housing and health and brighter futures.
In the words of an entrepreneur we met in Ningxia province, “Microfinance allowed us to go from existing to living … existing is merely finding enough food to eat, but living is truly feeling the substance of life, our hearts, and minds.â€
Californian non-profit United Prosperity developed a new twist to social lending – it is a peer to peer guarantee website. Instead of lending money directly and thus needing to transfer it internationally the “social guarantor” provides a cash collateral. This enables the small entrepreneur in the developing country to get a loan from a local bank, which he otherwise would be unable to obtain.
Bhalchander Vishwanath, founder and CEO of United Prosperity answered my questions on the new service.
P2P-Banking.com: What makes the guarantee model better then other lending models (e.g. Kiva or MyC4)?
Bhalchander Vishwanath:
Maximum impact: Due to United Prosperity’s innovative guarantee model which involves risk sharing with the bank, $1 in guarantee by the social guarantor could lead to $2 to $5 in loan to the borrower thus maximizing their dollar’s impact.
Local linkages: Our guarantee facilitates the creation of local linkages between domestic banks, MFIs and poor entrepreneurs. In the course of repaying the loan, both the entrepreneur and the MFIs develop credit histories that will enable them to access more funds at a later date with a lower guarantee percentage, or even without a guarantee. MFIs also get to form relationships with banks and offer other products like savings, insurance, money transfer etc. through the bank.
No foreign exchange risk: Since the loans from Bank to MFI and MFI to entrepreneur are in local currency, there is no foreign exchange risk involved. Most of the smaller MFIs do not have forex hedging capability and our model overcomes that.
Reduced interest: Our guarantee reduces the interest the bank will charge the MFI since the bank’s risk is lower. Some of the interest benefits get passed on to the borrower.
Scalability: There is enough money available in the developing countries. Our guarantee frees up those funds. It utilizes capital available effectively and in the long term it is a more scalable model.
Manages risk better: We get the additional benefit of monitoring of the loan by the bank which is not available with other person to person models.
P2P-Banking.com: How does “$1 in guarantee by the social guarantor could lead to $2 to $5 in loans” work? What determines the applicable ratio?
Bhalchander Vishwanath: The ratio is dependent on several factors. These include the MFI’s or borrower’s prior credit history with the bank or other banks, various banks internal guidelines, their focus on lending to Microfinance institutions and so on. For example for a given MFI we have seen two different banks asking for different guarantee percentages.
P2P-Banking.com: Does the Guarantor earn any interest?
Bhalchander Vishwanath: Guarantors do not earn any interest on their guarantees for two reasons:
It is legally complex.
We see ourselves as a ‘social business’. Nobel Laureate Mohammad Yunus states that a social business is ‘designed to be both self-sustaining and to maximize social returns’. We have only one objective: to combat global poverty. As a result, we do not provide any financial returns or interest to our social guarantors and hope to attract social guarantors who share our objective.
P2P-Banking.com: Does the Guarantor actually have to pay money into an account, or does this only occur if the borrower fails to pay back the loan?
Bhalchander Vishwanath: The guarantee we offer to banks is a cash secured guarantee. Thus the guarantor has to pay the money upfront. Once the loan is paid back, the money can be withdrawn. Continue reading →
Maneo.jp today launched the first active p2p lending service in Japan. The service connects lenders (aged 20-65) and borrowers (aged 20-60). Maneo verifies the identity, credit grade and the income of potential borrowers (minimum annual income required is approx. 30,000 US$). Borrowers then create a loan listing and set a maximum interest rate. Lenders can bid on the loan through an auction process.
