In early September I started funding peer-to-peer microloans to African entrepreneurs on MyC4. Yesterday the first repayments were credited to my account. Siraje Sselugo, a poultry farmer, that wanted to increase the number on chicken paid on time. I had loaned him 20 Euro for a 6 month term at 24% interest. Lydia Lwanga, who sells school stationary and wants to stock more products with the loan, repaid on time. My loan to her was 15 Euro for a 6 month term at 22% interest. All the other repayments were on time, too:
(Screenshot of my account balance at MyC4).
MyC4 allows minimum bids of 10 Euro. So far my portfolio contains 37 small bids on funded loans.
Earlier this month the first Australian p2p lending service iGrin.com.au quietly launched. Here is what Phil Hopper, iGrin's CEO told me, when I contacted him about iGrin's goals: 'We set out with the intention of being Australia's first and best P2P banking community. To date we have intentionally kept a low profile whilst we have gone about proving our business model and ensuring compliance with the Australian regulatory environment. The team behind iGrin has predominantly come from the banking industry and brings with it a wealth of product development, technology and lending experience. We have been impressed with the advances made in P2P lending overseas and are looking forward to applying these to the local Australian market and enabling everyday Australians to get great rates and great returns.'
Browsing the site, the main parameters are:
Borrower fees are 1% (for AA to D credit grades) or 2% (HR) or 90 AUS$ (whichever is greater)
Lender fees are 0.5 to 1.5% annual loan servicing fee (depending on credit grade)
Loans are possible for amounts from 2000 to 25000 AUS$ (approx 22000 US$)
Lenders can invest from as little as 100 AUS$ to a maximum of 25000 AUS$
There is a bididng process, where the borrower sets the initial (maximum) interest rate he is will to pay and lenders bid down the rate (like at Prosper.com)
Currently all loans are for a term of 3 years
The way the Australian credit rating works, simply appling (whether successful or not) for a loan may impact one's credit grade
A feature that differs from other p2p lending platforms is the 'Member direct loan' iGrin offers:
A service that iGrin provides to allow members to offer a loan direct to an individual. We will then undertake all of the transfer of funds and ongoing payments on behalf of the members. This is a great way for family or friends who wish to lend money to each other to have a third party (iGrin) manage all of the repayments and transfer of funds on their behalf. A formal contract is put in place between the two parties. It can also be a great way for someone to improve his or her credit rating.
While a family and friends loan is possible on other p2p lending services too, it is noteworthy that iGrin charges lower fees for Member direct loans than for normal loans.
Excerpts of answers to other questions I asked Phil Hopper, CEO of iGrin.com.au:
P2P-Banking.com: Which background does the management have?
iGrin.com.au: … The founders have over 50 years experience in Banking and Finance. The original founder and CEO is Phil Hopper who has a strong background in Banking and Technology most recently at the Commonwealth Bank of Australia and prior to that at Macquarie Bank. Continue reading →
Circlelending, bought by Virgin USA in May, has been renamed Virgin Money USA. According to Netbanker, we can expect the service to offer peer to peer lending like Prosper and Lendingclub in the future and this service might be used as an entry for more financial services. (Another source: NYTimes)
Lenders at Zopa do not (yet) select an individual borrower but rather select a market and a rate at which they want to lend their money. This is matched to borrower demand and if a match is found, money is lend out.
There is a 3rd party site tracking the development of the Zopa demand volume and charting it (daily, weekly, monthly, yearly). Recently the amount requested has gone down in most markets.
Lendingclub's loan volume has surpassed 750000 US$. So far the average interest rate is 11.10%. As you can see in the table the majority of loans went to borrowers with good credit grades.
Lendingclub states that the top states where Florida, New York and Massachusetts. This differs from the state distribution of the Prosper loans, where California, Texas and Georgia are the states with most loans. A possible cause is that Lendingclub.com is only open to Facebook users and might therefore target different user demographics then Prosper.com. (Source)
Dutch p2p lending site Boober.nl is in big trouble. A court in Rotterdam ruled that Boober needs a license, with the judge supporting the position of the regulating authority AFM. After Boober published its interpretation what this ruling means, the AFM clarified its position in a press release.
Under pressure Boober finally posted a statement on its homepage saying that while the site remains open and existing loans will continue to be serviced, Boober stops any lender bidding. Statement:
Beste Boober Gebruiker
In tegenstelling tot wat dinsdag en woensdag is gecommuniceerd heeft Boober gisteravond na overleg met de Autoriteit Financiële Markten besloten om de krediet-bemiddelingsactiviteiten voorlopig te staken. Dit wordt geëffectueerd door uitleners voorlopig niet de mogelijkheid te geven op leningen te bieden . De site blijft gewoon beschikbaar en het besluit heeft geen enkele consequentie voor lopende leningen.
Boober betreurt de ongelukkige wijze waarop zij met de markt heeft gecommuniceerd en verwacht begin volgende week meer duidelijkheid te kunnen verschaffen.
Boober's service was controversial in the Netherlands from the start. It was even subject of discussion of the Dutch national parliament.
An update on what will happen next is expected early next week.
Richard van den Toorn, publisher of the great site Booberwatch.nl has supplied P2P-Banking.com with this chronology of events: Continue reading →
