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.

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)

Giles Andrews on building Zopa, it’s brand and differentiating from banks.

Zopa has run a member competition, asking members to explain how Zopa works for a borrower or a lender.

I watched several of the created videos. My favourite is the video below by Glenmation.

Peer to peer lending is innovative and new. New users usually have lots of questions when grasping the marketplace mechanisms. Beyond the FAQ of the p2p lending service, a great place to learn is usually a forum, where users (mostly lenders) exchange experiences and post and answer questions.

There are “official” forums provided by the lending services and independent ones. One of the first ones, the official Prosper forum, became one of the most notorious ones. After Prosper “moderated” negative and critical posts it later deleted the initial forum in total. When a copied version of the forum’s archive was made available on seperate internet site Prosper tried to  shut the site down, but failed.

But this is an extreme example. I found that on nearly all other forums a very helpful and supportive attitude rules.

List of p2p lending forums

General

• P2P lending forum at Wiseclerk.com
• Soclen.pl (polish language, focus on Polish p2p lending services)
• P2P-Kredite.com forum (german language, focus on Smava, Auxmoney, MYC4)

Focus on one p2p lending service

• Zopa UK (official)
• Smava (official, german language)
• Kivafriends.org (on Kiva and microfinance in general)
• MYC4 (official, mainly english, some danish)
• Lendingclubstats (on Lending Club)
• Booberwatch (dutch language, on Boober)
• Prosper (official)
• Prospers.org (on Prosper, prosper critic)
• PPdai (official, chinese language)

If I have missed any great p2p lending forum, please comment with the URL and I will add it to the above list. Thank you.

(Photo credit: wili_hybrid)

When analysing numbers on p2p lending activity, users can rely on independent third party sites gathering statistics for many p2p lending services. These services either obtain the raw data via an interface provided by the service or they do parse the web pages of the service to collect the data.

Most of the statistic sites offer reports and tools to analyse and graph the overall development of the marketplace as well as the status of an individual lender’s investments.

The majority of the users are lenders, as the borrower usually needs the information only once - before applying for a loan - to determine what interest rate is appropriate.

Tools for Prosper:

• Lendingstats.com
• Ericscc.com

Tools for Lending Club:

• Lendingclubstats.com

Tools for MyC4:

• MyC4stats.com by Wiseclerk
• MyC4watch.com
• Gladkristen (danish)

Tools for Zopa UK:

• Ljay

Tools for Smava:

• Wiseclerk (german)
• Beobach (german)
• Verchow (german)

Tools for Auxmoney:

• Wiseclerk (german)

Tools for Boober NL:

• Booberwatch (dutch)

Feel free to copy this list, but please do set a link citing this page as source. If you know another social lending / p2p lending stats site, please let me know.

Long term readers may remember that the Wiseclerk.com domain initially started as a report site on Prosper.com. It was in fact together with Savagenumber.com the first service of this kind.

(Photo credit: ArtemFinland)

It has been said before - there might have been no better time to establish p2p lending. With the established system shaken and many consumers not getting loans as easily as before the market environment is good for peer-to-peer lending.

P2P lending gets good media attention. The Uncrunch.org initiative (in which Lending Club takes part) in the Change.org vote for new ideas finished in the Top 15.

On the demand site all p2p lending companies benefit from the crisis. On the supply site, in my opinion the effect is mostly positive too, but  some lenders are hesitant to invest their money in a new, innovative model and rather seek a save haven for it.

P2P lending sites that have demonstrated low default rates over a longer time and therefore low risk fared best - especially at Zopa UK supply rose strongly lately.

Bonmot from Spanish Comunitae:

Pues no sabemos si la crisis es buena para Comunitae, pero de lo que no cabe duda es de que Comunitae es buena para la crisis.

Translates to: “Well, we do not know if the crisis is good for Comunitae, but what is certain is that Comunitae is good for the crisis.”

As last year I’ll again attempt some predictions on what trends and developments can be expected in peer-to-peer lending 2009.

More competition and entering more national markets (probability 100%)
In many markets multiple p2p lending services will compete for the attention of lenders and borrowers. In other markets, where there is no national p2p lending service active yet (e.g. Canada, New Zealand), p2p lending will be introduced by the launch of a service. Possible candidates include Communitylend and Nexx.
It is hard to predict when the dormant US players (e.g. Prosper, Loanio) will overcome the regulatory hurdles and if that step is lasting.
The British market which has (compared to other markets) rather low regulatory barriers so far is dominated by a single player -  Zopa. I wonder if we’ll see the launch of a competitor there.

Boom of social lending services/p2p microfinance (probability 100%)
2008 saw the launch of Babyloan, Veecus and Wokai. Kiva funded more the 1 million US$ new loans in a single week in the end of December. The steep growth of Kiva, MyC4 and other services will continue and new p2p microfinance platforms will launch.

First Banks experiment with own p2p lending applications (probability 50%)
While p2p lending volumes are far from being a business threat to banks - banks do watch the developments. Possibly in 2009 a bank will launch its own p2p lending application. The principal aim will not be to generate revenue, but rather to collect experience and to gauge acceptance by the bank’s customers. It will be interesting to see banks testing the water on their path to implement a p2p lending concept that supplements their core business.

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As the end of 2008 approaches here is a look back on the highlights of peer to peer lending news in 2008:

• February: Gartner predicts that by 2010 social lending captures 10% market share; p2p lending in Poland takes off; IOUcentral launches in Canada - only to be suspended by regulator a week later
• April: Lendingclub enters quiet period for SEC registration; Cashare launches p2p lending service in Switzerland; Prosper goes national with 36 percent max. interest rate - partnering with WebBank; Zopa UK reshapes markets - concentrates on 36 and 60 months loan terms
• May: MyC4 has new interface and shifts currency risks to lenders
• August: Zopa UK launches young market; Maneo launches p2p lending services in Japan
• September: Kiva repayments are now immediately available for reinvestment; Zopa grows in Italy - has secondary market
• October: Loanio launches in the US; Friendsclear launches in France; Smava raises more venture capital; Zopa US closes; Veecus launces p2p microfinance; Lending club comes out of quiet period and introduces secondary market note trading platform; Prosper enters quiet period for SEC registration; Kiva wins grant; more than 685M US$ p2p lending volume; two funds will invest more than 2M Euro in Africa through MyC4
• November: 50 million US$ Kiva loans reached; Comunitae gets funding; SEC orders Prosper to cease and desist; Loanio suspends operations
• December: Class action lawsuit and other legal troubles challenge Prosper

After several hours speculation following an email sent to some US lenders of Zopa including the statement “In addition, the Zopa social networking Web site will no longer be available as of October 9, 2008″, the Zopa CFO (UK) has posted a clarifing statement on the Zopa discussion board.

The email from Affinity Plus is partially correct in that we are transferring our customers relationships to the credit union they either borrowed from or bought a CD from (invested in). We are NOT shutting the website today. As most of you know, Zopa’s US operation has a very different model to that in the UK and Italy in that it works in partnership with financial institutions (the credit unions) rather than being a pure peer to peer marketplace as it is here and in Italy. So while our model is doing very well in current market conditions, the US has been adversely affected in a way that couldn’t have been predicted when we launched and is no way the fault of our partners. For me, a real shame is that we weren’t able to launch the original model over there for regulatory reasons, esp given what a great job the regulators have turned out to have been doing there over the last few years, but that is another story….

The decision has not been taken lightly, and has obviously been difficult for our US colleagues, but due to the current credit crisis we have decided to withdraw from the US marketplace. This decision will have no impact on Zopa’s other activities in the UK, Italy and Asia. Zopa’s UK operation has experienced significant volume increases in 2008 with huge growth in new members and increasing lender returns, while continuing to maintain excellent credit quality – currently less than 0.5% of loans are affected by any kind of late payment issue, with actual losses below 0.04%. Zopa Italy has achieved the highest growth of any European peer-to-peer operation since its launch in January, and has recently launched the first secondary market for any peer-to-peer operation.

Zopa’s US customers’ deposit accounts continue to be insured by the NCUA up to $250,000, and servicing of those accounts as well as the loans will be assumed by the credit unions within 90 days.
…

The US website does not appear to have any statement regarding the changes.
Update: There is a blog entry on the Zopa blog now.