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Mintos – P2P Loans Secured by Residential Real Estate

January 25th, 2015 by wiseclerk

In Latvia p2p lending service Mintos has publicly launched. All loans are secured against residential real estate owned by the Latvian borrowers. CEO Mārtiņš Šulte told P2P-Banking.com: ‘We strongly believe that secured loans in our region and beyond offer much better risk/return matrix for investors. … We have raised 1 million Euro from a local venture capital fund. That has allowed to put together a great team and build the product. Our immediate future plans are to expand to other geographies on the borrowing side as well as test other types of secured loans. On the investing side we are already open to all European Union countries and Norway and Switzerland. We are constantly improving our product and putting daily updates as we go by taking into account investor suggestions and ideas so that we can deliver great user experience.’.

Actually Mintos started accepting borrowers and making loans in September already. Mintos prefinanced all loans and now the investors can invest into these prefunded loans. Due to regulation reasons, Mintos will continue to make all loans, before investors bid on them. CEO Mārtiņš Šulte added: ‘… we [will keep] 5% of each loan on our books to align our interests with those of investors.’.

Chart: Cumulative loan originations by Mintos

As said all loans are secured by real estate and all contracts with borrowers are signed before a notary, which eliminates the risk of identity fraud. Typcial interest rates range from 12% to 19% with loan amounts between 1,000 and 100,000 Euro (average now is about 8,000 Euro).Loan terms are from 3 months to 120 months.

Investing at Mintos – my test step by step

The minimum invest is 10 EUR per loan. Mintos charges investors a 2% annual loan servicing fee based on the outstanding principal.

Naturally I wanted to test the service myself before writing this initial review. It took only 2 minutes to register. I then transfered a small amount via SEPA transfer which – as SEPA is pretty fast – was credited 2 days later to my Mintos account.

There are currently 62 loan listings open for bidding. There are filters allowing investors to narrow the list they want to look at and the list can be sorted by clicking on the column headings. Bids can be made directly from the overview table or the investor clicks through to the loan details view. Read the rest of this entry »

RBS starts Referring SMEs to Funding Circle and Assetz Capital

January 22nd, 2015 by wiseclerk
The Royal Bank of Scotland has today announced that it is set to give thousands of small British businesses greater access to finance by formally referring customers to the p2p lending marketplaces Funding Circle and Assetz Capital.
From next week customers, who the bank is unable to financially help at the moment, will be signposted to both Funding Circle and Assetz Capital as options of alternative sources of finance. RBS accounts for 33% of the small business lending market, so is set to become the largest lender to refer small business customers. As well as this, after having explored Invoice Finance, Asset Finance, the Enterprise Finance Guarantee Scheme and the Regional Growth Fund, customers will be asked to visit the BBA’s dedicated website which also offers additional support.

The bank’s aim is to expand choice for customers whose loan applications do not meet the bank’s criteria, by signposting them to 2-5 peer-to-business lenders (P2B) alongside other alternative finance sources. This will happen through conversations that the customer will have with a relationship manager or through documents included with correspondence.

Groupama Banque to Lend 100M via Unilend

January 21st, 2015 by wiseclerk

Today p2c lending marketplace Unilend and Groupama Banque announce a partnership wherein Groupama Banque will lend directly 100 million euros to French small and medium enterprises through Unilend over the next four years. This is a first time ever partnership between a French bank and Unilend, a French p2p lending marketplace.

Bernard Pouy, CEO of Groupama Banque, said: “this ambitious partnership will allow Groupama Banque to sustain the growth of French businesses all across the country”. Nicolas Lesur, CEO and co-founder of Unilend, added: “this is a key milestone for Unilend, the marketplace lending industry and the financial sector more generally”.

Through Unilend, Groupama Banque will have the opportunity to lend money directly to the businesses of its choice alongside Unilend’s lenders. Groupama Banque, a subsidiary of mutual benefit insurance company Groupama, counts 536,000 clients all across France. Groupama’s values are social responsibility, proximity and solidarity and ”this partnership with Unilend is just another illustration of these values”, according to Sylvain Burel, in charge of Groupama’s communication.
Unilend has originated 7.5M EUR of loans since inception in December 2013 from 3,000 registered lenders.

Victory Park Capital to lend 150 million GBP via AssetzCapital

In a similar arrangement announced today, US private equity company Victory Park Capital will lend 150 million pound via AssetzCapital marketplace in the next 5 years.

LendingRobot Raises 3M from Runa Capital

January 21st, 2015 by wiseclerk

Seattle based Lending Robot, a 3rd party tool for investors to automate bidding on Lending Club and Prosper has raised 3 million US$ form Moscow based VC Runa Capital. The founders Gilad Golan and Emmanuel Marot had initially created a solution to automate their own investments on Lending Club. The growing needs to automate such investments convinced them to develop this further in the publicly available service Lending Robot. Lending Robot is free for the first 10K managed investment and beyond that charges users a small yearly fee. To comply with regulation, Lending Robot registered with SEC as an Investment Advisor.

The main advantage of the service is that it bids for investors a high speed. This is crucial because bidding on Prosper and Lending Club is very competitive and the most sought loans are filled very fast.

Google and Lending Club Pilot Offering Loans to Businesses

January 15th, 2015 by wiseclerk

Today p2p lending marketplace Lending Club and Google launch a new pilot program in partnership to facilitate low-interest financing to eligible Google partners. The program leverages Lending Club’s ability to provide access to credit in a highly automated, cost-efficient manner, and allows Google to purchase the loans, thus investing its own capital in its partner network to drive business growth. Lending Club will service the loans.

Eligible Google partners will have access to financing with low interest and no fees, enabling them to invest in business development and other growth opportunities, hire additional staff and plan for future expansion.

“This first of its kind program enables Google to invest its own capital in the growth of its partners,” said Renaud Laplanche, founder and CEO of Lending Club. “This is a new delivery model for financial services; this program opens up many possibilities for Lending Club partners to enable credit for consumers and business owners.”

Google for Work has built a network of more than 10,000 partners in recent years, including resellers, consultants, and system integrators, which help Google distribute its applications and services. The company recently launched a new incentive program for partners, boosting the rewards for top performers. The partnership with Lending Club is part of this expanded incentive program.

Currently, the pilot program is available to Google reseller partners in the U.S. who meet certain eligibility criteria. Eligible partners can obtain two-year loans of up to $600,000 to invest in growth initiatives. With an interest-only structure in the first year and a fully amortizing second year, the loan payback schedule is designed to match the cash-flow profile of growth investments.

Zencap to Expand into Netherlands in February

January 14th, 2015 by wiseclerk

Zencap, the German peer-to-company lending marketplace which launched in March 2014, will launch in the Netherlands in February 2015. This is Zencap’s third target market after Germany and Spain. The Zencap team has grown to over 60 employees and Zencap has originated 7 million EUR in loans so far.

International P2P Lending Services – Loan Volumes December 2014

January 5th, 2015 by wiseclerk
Several p2p lending marketplaces managed to grow the loan originations in December despite the Christmas season. Especially Prosper had a record month.  I added one more service. I do monitor development of p2p lending figures for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending services.
Investors living in markets with no or limited choice of local p2p lending services can check this list of marketplace open to international investors.

Table: P2P Lending Volumes in December 2014. Source: own research
Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations.

Notice to p2p lending services not listed:
If you want to be included in this chart in future, please email the following figures on the first working day of a month: total loan volume originated since inception, loan volume originated in previous month, number of loans originated in previous month, average nominal interest rate of loans originated in previous month.

Review of My Bondora Loan Portfolio After Q4/2014

December 30th, 2014 by wiseclerk

In October 2012 I started p2p lending at Bondora. Since then I periodically wrote on my experiences – you can read my last report here. Since the start I did deposit 14,000 Euro (approx. 17,000 US$). My portfolio is very diversified. Most loan parts I hold are for loan terms between 36 and 60 months. Together the loans add up to 19,528 Euro outstanding principal. Loans in the value of 2,158 Euro are overdue, meaning they (partly) missed one or two repayments. 1,853 Euro principal is stuck in loans that are more than 60 days late. I already received 10,316 Euro in repaid principal back – this figures includes loans Bondora cancelled before payout. I reinvested all repayments.

Chart 1: Screenshot of loan status

At the moment I have 280 Euro in bids in open market listings and 3 Euro cash available.

Chart 2: Screenshot of account balance

Return on Invest

Currently Isepankur shows my ROI to be over 27.56%. In my own calculations, using XIRR in Excel, assuming that 30% of my 60+days overdue and 15% of my overdue loans will not be recovered, my ROI calculations result in 25.0%. Read the rest of this entry »

Bitcoin P2P Lending – a Primer in 8 Steps

December 18th, 2014 by Guest

This is a guest post by Radoslav Albrecht who is the Co-founder and CEO of Bitbond – a global Bitcoin peer-to-peer lending platform based in Berlin

When Zopa went live in 2005 it was the first online peer-to-peer lending platform. At the beginning many people thought it wasn’t the best idea to lend money to individuals. The majority felt better by bringing their savings to a bank. Critics didn’t realize that banks were handing out the money to individuals and businesses in quite the same manner – only that through P2P lending this happens at lower operating costs and better customer convenience.

Since early 2009 another new financial innovation came up – the digital currency bitcoin. Entire books have already been written about bitcoin. We will only scratch its surface here. Bitcoin can be looked at from at least two perspectives, the technology perspective and the application perspective. We won’t dive into the technology here. When discussing bitcoin P2P lending, the application of bitcoin as a currency is the relevant perspective.

    1. Bitcoin as a currency

As a currency bitcoin offers a number of significant advantages. You can send bitcoins to any location in the world and they will be transacted in a few seconds. It’s very similar to sending an email. Therefore the best analogy between bitcoin and a wire transfer is that between email and a letter. The letter can take up to a couple of days depending on where you’re sending it. The email gets to the receiver instantaneously, and so does bitcoin. Read the rest of this entry »

Bondora Ratings Create a Single Eurozone Lending Marketplace

December 17th, 2014 by Guest

This is a guest post by Pärtel Tomberg, CEO of Bondora.

This month we started the roll-out of Bondora Ratings, a loan application rating system based on the proprietary credit scoring model, with the aim to bring better predictability and consistency of the returns for investors active on Bondora platform.

Our initial aim for developing a credit scoring model was to bring the best banking practices to peer lending. Banks might have failed at providing people with affordable credits, but they have done a few things right, such as developing strong credit scoring models, that have helped them generate premium returns for their investors. With Bondora Ratings we are bringing credit scoring model to individual investors so they could maximize their returns in the same way banks do.

Being a platform that facilitates the exchange between lenders and borrowers, we believe it is our responsibility to bring the best practices, such as credit scoring, to peer lending; thus, making it an effective, efficient and mutually beneficial process for both parties. Eventually, Bondora Ratings will allow credible borrowers get a better rate for a loan, while investors will receive a predictable return level.

On top of bringing banking practices to peer lending, we saw a need for a simple, transparent and unified way to represent the risks and potential returns associated with a particular loan. Until recently, our investors used their own sophisticated models to evaluate the risks and plan their investments at Bondora. We have supported the initiative by offering a wide range of filters and providing extensive data export sets, and we will continue to support those investors in the future by providing a Trading API.

However, as the platform grows, we see an increasing inflow of investors that do not have a need or desire to engage into extensive number crunching. The historic performance of peer lending platforms, and Bondora in particular, indicates that peer lending provides premium returns compared to other assets classes and investors want a simple and easy way to earn those premium returns. Read the rest of this entry »