P2P-Banking.com

Editor's note: This is a paid story (ad), written by a third party which I have agreed to publish, since I believe it fits the interests of the readership of this blog. I am not involved in the sale.

Company looks to sell all rights to its proprietary P2P lending technology. The company has been quietly in development for the past year, though has now decided to halt launch plans for undisclosed reasons.

The company has developed a complete P2P lending web application that will provide any aspiring P2P company with technology to support rapid deployment in any geographical market. It is based on the popular auction-style bidding format for lenders. The front end is fully branded, and sale can be made to include branding, or packaged as a white-labeled solution.

Terms of sale can be negotiated to include customization, enhancements, and project management / consulting.

This is an extremely rare opportunity to acquire the world's only out-of-the-box P2P lending system allowing the purchaser to enter the red-hot Person-to-Person Lending space.

All enquiries should be directed through the website at:
www.p2ptechforsale.com

Technical specifications, terms of sale, and all other questions will gladly be discussed under terms of a standard Non-Disclosure Agreement.

Serious enquiries only, please.

German p2p lending service Smava.de made some changes:

• Borrowing for business purposes is now allowed. The borrower still is an individual person but is no longer limited on private purposes of the loan
• Borrowers may borrow up to 25,000 Euro (approx 39,200 US$), previously the maximum was 10,000 Euro
• Maximum amount any lender can invest in the marketplace is raised to 100,000 Euro (previously 25,000 Euro)
• Loan terms are now selectable 36 or 60 months (previously only 36 months); the insurance pools (Anleger-Pools) are seperated by credit grade and term. This complicated construct will influence lenders when deciding to bid on loans that are otherwise comparable but differ in loan term, since the level reached in the insurance pools directly impacts each payment rate.
• Bad debt sales rates have been lowered for lower credit grades (previously it was 22.5% to 25%, now it is 15% to 25% depending on credit grade)

(Source: P2P-Kredite.com)

Since it's launch in February 2007 Smava has funded 457 loans with 2 million Euro (approx 3.14 million US$) loan volume. 8 loans have defaulted and currently 9 loans are late.

Yesterday the headline of Dutch De Financiele Telegraph read "ABN AMRO brings together borrowers and lenders". ABN Amro is a large bank in the Netherlands. The article mentioned Boober and that ABN Amro is offering a different service.

So what is ABN Amro offering? P2P lending?

Actually the service in question can be found on this page and it is a free download document that lenders and borrowers can use to agree on a loan contract between them. Other the supplying the download ABN Amro is not involved in any resulting loans. In fact the site states (in Dutch):

… The general information on this page has not been meant as a recommendation. ABN Amro will not take liability …

I guess that can be filed under marketing using the 'peer-to-peer loan' buzz or at best under customer service.

Dutch Boober which announced and worked on entering the German p2p lending market for over a year (see earlier coverage) apparently dropped that plan.

Source: P2P-Kredite.com

Zopa UK has announced that it will remove the options to lend for 12, 24 or 48 months and concentrate on lending terms of 36 and 60 months. The changes apply only to money lend through Zopa markets not to Zopa listings.

Why are we making these changes?
- Since Zopa began more than three years ago, more than 95% of your loans have been taken for a period of 3 years or less.
- The popularity of larger loans repaid over 5 years is increasing, particularly since we introduced the new fixed borrower fee.
- Almost half of our new lenders who sign up to Zopa do not become active and our hypothesis is that it is just too time consuming for them to make offers to all of our markets.
- This allows us to simplify the marketplace considerably, while still allowing borrowers to repay their loan early with no penalty.
- Because listings still enables all loan terms from 1 to 5 years, Zopa will continue to offer a wide variety of borrowing and lending options.
- By structuring repayments over at least 36 months, we aim to encourage fewer borrowers to repay their loan early, maximising the interest you earn from each loan and reducing the period your money might spend in your holding account. This is because the loans that have been repaid early to date were mostly taken for 12 and 24 months in the first instance, so that borrowers had paid back a good proportion of their loan after just a few months.
- We’re not envisaging that there will be any significant financial impact for Zopa from these changes. At most, we would earn 0.5% of the outstanding capital for a little longer if we can dissuade early repayment, but since we would hope that lenders would relend any funds repaid early anyway, we’re unlikely to earn anything more significant. These changes are purely aimed at simplifying our offer.

Lender reactions in the forums (19 pages of comments) are mostly negative.
Some lenders speculate that this move is a necessary result of the new flat fee which was introduced earlier. Borrowers pay 94.25 GBP of the loan amount. For short term loans the impact of this fee on the APR is higher then for long term loans. 

MyC4 has successfully funded 1000 loans to entrepreneurs in Africa since launch in May 2007. So far none of the loans has defaulted and average interest rate for lenders is 11.7%.
Tim Vang, one of the co-founders of the Danish startup told P2P-Banking.com that the MyC4 will release a new version in May with a new design and better interface. MyC4 also plans to provide loans in additional countries (currently Uganda, Kenya and Cote d'Ivoire).

MyC4's annual report 2007 is available on the Internet (English and Danish). While the company realised a loss of 2.8 million DKK (approx. 0.6 million US$) in 2007, it aims for break even in 2009.

 
(Source: MyC4 loan statistics, Wiseclerk.com, Apr. 19th)

Prosper.com made the videos of the Prosper Days 2008 available. Thanks Prosper!

I will just feature one session here. In "Managing large portfolios" Adam Weyeneth, President of Fair Deal Credit talks about the issues for institutional lenders that want to invest into the asset class of p2p loans.

Link to this video and the related videos of the other sessions.

Announced today Prosper.com has achieved nationwide lending (exceptions South Dakota and Texas) with an interest rate maximum of 36 percent. Previously maximum interest rates varied on a state by state basis depending by the licenses Prosper had acquired.

Prosper chose the same construct to go national as did Lendingclub in December - both partnered with WebBank, Utah.

All loans originated through the Prosper marketplace are made by WebBank, a Utah-chartered Industrial Bank. Prosper provides services to WebBank in connection with the origination of such loans and Prosper services loans made to Prosper borrowers on behalf of registered Prosper lenders who purchase such loans.

This step has good potential to multiply the monthly loan volume originated by Prosper, as chances for obtaining a loan were in the past harmed in some states by low state interest rate caps (especially for lower credit grades).

Swiss Cashare.ch recently launched as the first p2p lending platform in Switzerland. The company, owned by Michael Borter (link to German language interview) and Roger Mueller has partnered with the collection agency C&S Credit Management AG, which handles all monetary transactions.
Interest rates and loan durations are set by borrowers and lenders bid in a 14 day auction (minimum bid amount is 500 CHF which is approx 500 US$). If the loan is fully funded further bids in the remaining auction period will cause the interest rate to drop in 0.1 percentage steps, while old bids are outbid.

The fee schredule includes:

• For lenders and borrowers: 5 CHF fee for identification process
• For borrowers: 19 CHF listing fee
• For borrowers: 0.75% of the loan amount per year servicing fee
• For lenders: 0.75% of the loaned amount per year servicing fee

This results in borrowers having to pay even if their loan does not fund.

An unusual point in the process is that lenders have to sign a written contract for each successful bid and send it via postal mail to Cashare. That seems a bit uncomfortable to handle. 

As Cashare launched only recently there currently are only 4 active loan listings. 

If you have used Cashare as a borrower or lender, please share you experiences in the forum. Thank you.

Surprisingly Lendingclub.com stopped signup for new lenders and existing lenders can not make bids on new loans (old loans are continued to be serviced). Borrowers can still obtain new loans - they are funded directly by Lendingclub. The announcement email sent out to members is quoted in this blog post.

The Lendingclub website states this message:

Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.

The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.

Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.

On Techcrunch there is speculation that "Lending Club is looking to obtain a broker dealer license from the SEC that would legitimize its operations".

If this is the case I could not find a recent SEC filing connected to this. The last one I found dates February 13th.

Netbanker has a short statement from Prosper, essentially saying that Prosper believes itself to be in compliance with all state and federal laws.