P2P-Banking.com

In early summer 2010 Yes-secure.com launched the second p2p lending service active in the UK. Dr. Chandra Patni, CEO of Yes-secure answers my questions.

P2P-Banking.com: Dr. Chandra Patni, please tell us about the background of the Yes-secure management team and what lead to entering the p2p lending market?

Dr. Chandra Patni: I came up with the business opportunity in 2008, having reviewed Zopa I felt that a social networking based person to person lending marketplace site could become a successful alternative to Zopa. I realised there were opportunities to build and complement the social lending market. Consumers need choice. YES-secure.com allows person-to-person lending alongside social networking as people want to know who they are lending to.

P2P-Banking.com: How is Yes-secure funded?

Dr. Chandra Patni: YES-secure.com is funded by private investors alongside the directors of the company.

P2P-Banking.com: What benefits does Yes-secure offer to lenders and borrowers?

Dr. Chandra Patni: Lenders: YES-secure.com provides UK savers and investors a new way to beat inflation and earn better returns than by investing their savings in fixed deposits in a bank. Along with the introductory offers and waivers, there are a wide range of markets (A*- E) allowing lenders to manipulate their investment across various markets getting them high, assured and steady returns. Debit card verification upon registration, stringent underwriting procedures and assigning markets in keeping with the borrowers’ creditworthiness make YES-secure a safe investment destination. Additionally, YES-secure offers a secure means of social network based lending and borrowing implying lower default rates and higher returns for lenders.

Borrowers: Borrowers can get competitive rates from real people. They simply describe how much they are looking to borrow, over what period, and the maximum interest rate they are willing to pay. Then they can simply sit back and watch people bidding to lend to them. Once they find a rate they like, they can accept it and get the money paid straight into their bank account. More traditional methods of personal loan approval rarely take personal information (such as connections, personality, and general circumstances) into account and are approved or declined based solely on credit history and financial circumstances. YES-secure combine both the important credit background as well as pertinent personal information on each borrower. (more…)

In the UK Zopa expects a record month of new p2p loans funded. CEO Giles Andrews told P2P-Banking.com today: “We are going through some dramatic growth at the moment. July was a record month with 908 loans for 4.5 million GBP, but we should do 1100 for 5.5 million GBP in August.”

Visualizations are great to show data that would otherwise just be a long list. I decided to create a map of the p2p lending landscape in Europe. It shows active and discontinued p2p lending services in Europe (including p2p microfinance). Not listed are sites that are in pre-launch stage. All of these marketplaces have been featured earlier in the P2P-Banking.com blog. If you want more information about any of them just enter the name in the search box on the top right of this blog.

Notice to other websites: You are free to copy and use this map, provided you agree not to alter or resize the image and you will set a link to this article.

Notice to p2p lending sites: If you want to be included in a future version of this map, contact me to learn how.

Funding Circle has launched it’s peer to company lending service in Britain. As reported by P2P-Banking.com in February the startup received 1.1 million US$. Any UK resident can lend either by individually selecting businesses or by using the autobid feature and spreading the investment over several matching businesses. While loans last for 1 to 3 years FundingCircle – unlike other p2p lending sites – allows lenders to access their money easily: Selling of parts of loans funded to other lenders is possible (secondary market).

In 2010 lenders are not charged any fees to use Funding Circle (in 2011 there will be a 1% annual servicing fee and a 1% sales fee).

All businesses applying for loans are screened by Funding Circle’s underwriters using data supplied by Experian to ensure they are creditworthy. A business may apply for a Funding Circle loan amount between 5,000 and 50,000 GBP. (more…)

London based Funding Circle has announced that it has raised 1.1 million US$ form undisclosed private investors and will launch it’s p2c lending service Fundingcircle.com in Q2 2010.

Director and co-founder James Meekings informed P2P-Banking.com:

When the platform launches later this year, people will lend small amounts to a range of different, creditworthy businesses to spread their risk. In turn, those businesses will be borrowing from a multitude of people to get a lower interest rate. … Funding Circle will also empower people to support their local community, by allowing lenders to target businesses with characteristics, such as locale, that are valued by them.

Small businesses will initially be able to apply for unsecured loans of 5,000 to 50,000 GBP. The businesses are checked for fraud and must meet a number of minimum credit requirements verified by the UK’s leading credit agency. Experienced underwriters then further analyse and screen businesses before allowing them onto the Funding Circle platform.

Bigcarrots.com wants to bring business and lenders together. Peculiar name, isn’t it? Images from Bugs Bunny cartoons floated on my mind. Positive indeed – but not at all related to finance.

Bigcarrots applies the concept of peer to peer lending to funding companies. Lenders can lend in chunks of 25 GBP, and a company can apply for unsecured loans of up to 25,000 GBP for 3 to 36 months loan terms. Lenders even have the possibility to exit early by reselling portfolios on a reseller platform.

The level of information provided on the website is low, the FAQ is short. For example their is no description how the risk assessment of applying companies is done by Bigcarrots. The About section gives little information on the background of Bigcarrots. I used the contact form to ask for more information, but did not receive an answer.

Zopa has changed it’s debt purchase process due to changes in legislation. (more…)

British p2p lending company Zopa has recently entered two partnerships.

Zopa Prime

Zopa partners with the Charity PRIME to offer loans to entrepreneurs over 50 starting or running a business. The loan is not a loan to the business but a personal loan of up to 15,000 GBP (approx 24,125 US$). PRIME is the Prince’s Initiative for Mature Enterprise. The charity’s role is to vet the business plan of the applicant.

Lenders benefit because all Zopa prime loan listings are 50% guaranteed by PRIME. More details on how to obtain a loan.

Zopa and Good Energy

Zopa also partnered with Good Energy, a 100% renewable electricity supplier. Customers of Good Energy can use a Zopa loan listing to fund the initial installation cost of solar panels or wind turbines. In this partnership Zopa uses affiliate links with a branded landing page:
http://www.goodenergy.co.uk/affiliates/zopa

Benefits for Zopa from the partnerships are:

1. More borrowers
2. More quality without more costs – borrowers are vetted/screened by partners
3. 50% of loan amount secured for PRIME loans
4. Possibly earning referral fees from the affiliate link to Good Energy
5. Great story for press coverage and marketing (catchwords:  “Prince Charles”, “renewable energy”, “credit crunch”, “older age”, …)

(more…)

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.

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)