P2P-Banking.com

The borrower who receives the 10,000th loan from Zopa UK will be lucky - it will be an interest free loan.

Furthermore Zopa has a referral promotion in July. Zopa pays 100 GBP (approx. 165 US$) to members that refer a borrower who successfully gets a loan in July.

P2p lending site Smava.de for the first time reached more than 1 million Euro (approx. 1.4 million US$) loan volume funded in one month. One factor contributing to this is that Smava is in the top 10 rankings for German Google search results for the keywords kredit (engl. loan) and kredite (engl. loans) since the end of May. I find it interesting that there is not one single bank site in the top ten for these search results.

Furthermore Smava profited form TV exposure, which also helped its competitor Auxmoney to achieve a record month with approx. 130,000 Euro loan volume.

In international comparison by p2p lending loan volume funded per month, Smava is in the top 5 behind Virgin Money, Kiva, Zopa UK and Lending Club.

(Source: Smava p2p lending stats; A-H are credit grades)

and other financial constructs you so far had a wrong perception of:

(via Finance 2.0)

MYC4 will change its fee structure for borrowers for new loans starting in July. One main point of criticism had been that MYC4 by charging origination fees profited from any loan, regardless whether it was paid back or defaulted.

MYC4 has reacted. In future there will be no origination fees and only fees on the interest of the repayments. This uis a step in the right direction as the interests of MYC4 are now more aligned with the interests of the lenders. To make or increase profit MYC4 has to avoid and decrease defaults.

Quote of the announcement:

We have made a strategic decision with regards to the way MYC4 earns money by removing “closing fees” and only charging “interest fees” on the loans, when they are being repaid. That means that we put ourselves on the same side as the Investors on MYC4 only earning money when the Borrowers repay their loans.

With this change we want to signal that we believe strongly in the viability of the Businesses, and to align MYC4 earning with the earning of the investors and similar to investors be affected by any defaults and currency fluctuation.

Concretely, MYC4 will change the current income structure, where the Borrower is charged a flat fee of 2% of the loan amount, payable only when the loan is actually disbursed, and an additional fee of 2% (interest spread) when the loan is repaid on the basis of a declining balance. This corresponds to a total fee to MYC4 of approx. 3 percent of the total loan amount.

Instead, we will charge 6% interest commission. Considering a 12-month loan time, this 6% charge matches the 2% on initial balance plus the 2% on outstanding balance fees. The change will in most cases be neutral for the borrower.

In the same line, MYC4 encourages our Partners to shift their income from closing fees to repayment (interest) fees to show their belief in the quality of their portfolio towards investors. However, our Partners are not obligated to change their income structure, so it is up to each of them if and when they will change due to for instance their cash-flow situation.

Today I have added the new ‘Peer to Peer Lending Jobs‘ section and started it with listing the current 4 positions startup Loanio wants to fill in Nanuet, NY.

As P2P Lending is a very new and emerging field there are very few experts who have gathered previous practical experience in this field and these are highly sought after. One example is Arkadiusz Hajduk, who founded Fairrates in Denmark, then worked for IOU Central in Canada and now works at Smava.pl in Poland. Read the rest of this entry »

Positive TV coverage (see video here) on nationwide German TV on Monday during primetime caused traffic spikes at the German p2p lending services Smava and Auxmoney. The websites were partially down during Monday and Tuesday or so slow they were practicably not useable. Auxmoney reacted by temporary deactivating non-vital functions like sorting. Meanwhile stability of the web applications has been restored.

The surge in user demand led to a 20% increase in active lenders at Auxmoney and most ever parallel open loan listings (currently 332). At Smava nearly all reasonable loan listings are funded within a few days or even hours at the moment.

To encourage more loan listings Smava has upped the bonus for inviting new borrowers to 150-200 EUR (approx 200 to 275 US$) for each referral of a borrower that is success fully funded (up from 100 Euro before).

Kiva has now enacted changes in how currency risks are accounted for. The model was first proposed in March.
Now MFIs can choose “currency risk protection” for their new loans. If this option is selected lenders will have to cover any losses that arise from a devaluation of the local currency exceeding 20% (for the part that is over the 20%).

On listed loans at Kiva there will be a new information status on the “about the Loan” Section under “Currency Exchange Loss”. The status will either be:

• “Covered”: Meaning the MFI covers any losses (like it has been in the past)
• “Possible”: The MFI has opted for the new rule - the lender covers currency losses above 20%

I browsed some new loan listings today - most are still offered under the “covered” rule, one example of a loan under the new “possible” rule is this Tajikistan loan. Read the rest of this entry »

The growth of the disbursed loan volume has risen sharply at Zopa UK this year, while the average interest rate is 1-2 points lower than last year.

(Chart by sl75, source)

Loanio has filed a S-1 registration with the SEC. P2P lending service Loanio had been briefly active in October and November last year before voluntarily closing to new users in order to seek SEC registration approval.

In the new SEC filing Loanio wants approval for offering 50 million US$ in notes based on peer to peer loans via their website Loanio.com. The filing includes the outlook for a secondary market (loan trading platform via a broker) and the plan that Loanio might partner with a “national financial institution”. Should that be achieved, borrower loans could be originated through this lending institution and then sold and assigned to Loanio. This would allow Loanio to offer loans to borrowers in more than the 22 states it has individual state lending licenses for now, and would eliminate (some) state interest caps.

The filing also gives insights into the company structure and expenses since foundation. Founder Michael Solomon hold 97% of the company shares.

Under the requirement to file with the SEC, starting a peer-to-peer lending company in the US market takes an unusual long pre-launch phase compared to other internet based business models.

Lending Club already completed the SEC approval process, while IOU Central and Prosper currently undergo this process. Pertuity Direct operates under a p2p lending model with a different setup.

The State of Montana signed an agreement with Prosper Marketplace Inc. to resolve matters relating to unregistered securities and securities fraud. Read the rest of this entry »