IOU Central, the first P2P lender in Canada, has suspended all new loan requests and stopped bidding on loans in order to "resolve a regulatory matter." This is the announcement on their website:
What Functionalities Are Available?
Please note that the posting of new loan requests and the placing of new bids on loans has been temporarily stopped. Any loans which have already closed and been funded will be repaid and serviced in accordance with the borrower and lender agreements.
Why Is IOU Central Operating With Limited Functionalities?
IOU Central is now operating with limited functionality while we resolve a regulatory matter. IOU Central is acting in a very new area. We are the first in Canada, although similar models are operating under similar regulatory environments in the US and the UK. We are modeled on those innovative enterprises. We are committed to working with all the relevant regulatory bodies in order for us to continue to offer this service to borrowers and lenders. We will take all measures necessary to ensure we are working in full compliance with all regulations.
When Will IOU Central Be Fully Operational?
We will notify all our users by email when the site is fully operational. If you are not already a user, you may register with us and we will notify you by email when the site is fully operational.
CommunityLend is also expected to open in Canada soon. In comments on Prosper Lending Review, Colin Henderson, the CTO and co-founder of CommunityLend has said, "We remain on plan for our upcoming launch as we work through it with our various partners."
(Thanks for the tip Wiseclerk)
Prosper #49 on the Fast 50
As announced on the official blog, Prosper joined the likes of Amazon, Walmart and IBM on Fast Company's 2008 list of the 50 most innovative companies.From the award profile: "Borrowers include stretched homeowners, college-goers, credit-card junkies, and entrepreneurs; lenders are average folks, including Larsen himself, who has funded more than 450 loans. Intriguingly, with the credit crunch making it tougher on small-business owners to get capital to expand, more entrepreneurs are turning to Prosper as an alternative, posting business plans and photos as part of their pitches; these loans now account for about 20% of funded volume."
I also found this tidbit interesting, "So far, Prosper's lenders and borrowers are only in America, but a new joint venture would let Japanese lenders bid on American loans -- and the goal is to connect people (and capital) globally." We knew Prosper was looking to expand to Japan but I assumed that meant Japanese lenders lending money to Japanese borrowers. If the number of lenders increase without increasing the number of borrowers then interest rates will be driven down. Perhaps this is why Prosper recently increased their referral bonus for new borrowers.
The top three Fast Companies are Google, Apple and Facebook. Prosper has won numerous awards in the past including Time magazine's #1 website of the year in 2006 and one of the 50 best websites of 2007.
ABC 7 covers Prosper Days
ABC 7 has produced a short clip with highlights from Prosper Days. It includes an interview with "Freakoconomics" author Stephen Dubner and lender Marilyn Paguirigan. See our previous post for the rest of Prosper Days coverage by the mainstream media and blogs.
ABC 7: New lending site helps people "prosper"
Prosper Days 2008 wrap up and a look back to 2007
The long anticipated Prosper Days 2008 is now over. We have published notes on Chris Larsen's keynote address. Here is some other coverage around the net:
Prosper Days 2007 Keynote Address by CEO Chris Larsen
Prosper Days 2007 - Lender Panel
RGlad, JaneyBooboo, Pensioner, L5
Prosper Days 2007: Town Hall Meeting
Prosper Days 2007: Group Leader Panel
- SF Business Times - Prosper CEO sees company benefiting from credit crunch
- NetBanker - Prosper Helps Borrowers Tap the Value of Their "Social Capital"
- Lazy Man and Money - Prosper Days (Day 1 Overview)
- j9359 - Prosper Days 2008 is over now
- Prosper Marketplace Monitor - Prosper didn't catch fraudster using its services, but CEO takes credit for conviction
- Muychingon - Getting ready for Prosper Days
- Elaine Vigneault - Initial Thoughts - Prosper Days
- zcommodore - Things that make you go hmm
- bamalucky - Are you at Prosper Days? and The last Prosper Days?
- Prosper Forums - Live reporting from PD08 in IRC (login required)
- Rateladder - Bidding With the Prosper API Code Example QuickSnipe.java
- Prosperous Land - Vicarious Live-Blogging: Prosper Days
We expect Prosper to post videos and photos from Prosper Days 2008 in the near future. In the meantime, here's a look back to 2007:
RGlad, JaneyBooboo, Pensioner, L5
Prosper Days 2008: Keynote from CEO Chris Larsen
Here are a few notes from Chris Larsen's Prosper Days keynote address.- Prosper provides strong loyalty and strong diversification
- Shared several success stories of prosper loans (Soldier loan consolidation, loan for a toy business, super prime home improvement loan, charity loan for needy family, and a loan from a friend)
- Prosper can improve borrower's credit
- Prosper is growing - $120,000,000 in loans and 600,000 registered members
- As he has mentioned before, lenders are avoiding subprime loans; in January 2007 subprime loans represented 24% of loans and in January 2008 they made up 5% of loans
- "Attractive" ROI loans up nearly 200%
- Prosper started giving rate guidance to borrowers and added rate tools for lenders
- Prosper now warns bidders when they are likely to get a low estimated return
- Portfolio plans were introduced this year
- Rate guidance to borrowers has significantly reduced the number of borrowers requesting "low ROI" loans and increase the "attractive ROI" listings by 250%
- Borrower requested features: schedule a date for a future payment, save listing draft to finish later, preview listing, re-use listing as template, pay loan with lending balance, have two active loans
- Lender requested features: watch list, instant transfers, better guidance on manual bidding, addition of loan categories, show community payments on group, add "4+ months late" loan status, show history of second borrowers, instant transfers, 1099's on a single statement, increase max rate to 35%
- Prosper opened a new forum and now has an official blog
- Social capital - impact of groups on default rates; small groups do better than large groups
- Endorsements from friends improved performance and rates
- Collections improved - $34,665 collected in August 2007 and $69,807 in January 2008
- Fraud prevention - first conviction for fraud
- New feature - portfolio plans can be created and shared
- Looking ahead - More lender control (tools, transparency, secondary market), growing attractive listings, credit crunch is an opportunity
Update: There was lots of blog and news coverage of the conference - ABC 7 was also there.
Prosper Days '08 kicks off
Here's the first mainstream media report on Prosper Days:
SF Business Times - Prosper CEO sees company benefiting from credit crunch
"Prosper CEO Chris Larsen said Monday that the San Francisco company is benefiting from the credit crunch that's sending more lenders and borrowers to the person-to-person lending marketplace.
More people with good credit are coming to Prosper as home equity loans and credit cards become harder to obtain, Larsen told 350 people attending the company's Prosper Days in San Francisco.
"Banks are retrenching so aggressively," he said. Prosper lenders have also pulled back on loans made to subprime borrowers.
Larsen also anticipates more people might be willing to lend on Prosper as rates fall on other investments following the Fed's dramatic rate cuts.
...Lenders attending Prosper Days made it clear that they're eager for the company to do more to crack down on fraud, even as Larsen touted Prosper's first conviction for someone committing fraud through Prosper."
According to posts by lenders on Prosper.org's forum and IRC, the man convicted of fraud on Prosper is Jehoshua Sean Kilen. The News Tribune reported on the case in November 2007 without mentioning Prosper:
Lakewood man off to prison for bank fraud
Lakewood resident Jehoshua Sean Kilen was sentenced Friday to 18 months in federal prison after being convicted of bank fraud, the U.S. Attorney's Office reported in a news release Friday.
Kilen, a former employee of KeyBank, used insider information to identify inactive accounts that still had money in them. Some of the accounts were inactive because the customer had died, according to the release.
Kilen, 27, would transfer money from the inactive accounts into accounts he could withdraw cash from, federal authorities said. All told, he got away with $138,000 before getting caught.
The long arm of the law caught up with him in California in February and pleaded guilty in May in Tacoma.
SF Business Times - Prosper CEO sees company benefiting from credit crunch
"Prosper CEO Chris Larsen said Monday that the San Francisco company is benefiting from the credit crunch that's sending more lenders and borrowers to the person-to-person lending marketplace.
More people with good credit are coming to Prosper as home equity loans and credit cards become harder to obtain, Larsen told 350 people attending the company's Prosper Days in San Francisco.
"Banks are retrenching so aggressively," he said. Prosper lenders have also pulled back on loans made to subprime borrowers.
Larsen also anticipates more people might be willing to lend on Prosper as rates fall on other investments following the Fed's dramatic rate cuts.
...Lenders attending Prosper Days made it clear that they're eager for the company to do more to crack down on fraud, even as Larsen touted Prosper's first conviction for someone committing fraud through Prosper."
According to posts by lenders on Prosper.org's forum and IRC, the man convicted of fraud on Prosper is Jehoshua Sean Kilen. The News Tribune reported on the case in November 2007 without mentioning Prosper:
Lakewood man off to prison for bank fraud
Lakewood resident Jehoshua Sean Kilen was sentenced Friday to 18 months in federal prison after being convicted of bank fraud, the U.S. Attorney's Office reported in a news release Friday.
Kilen, a former employee of KeyBank, used insider information to identify inactive accounts that still had money in them. Some of the accounts were inactive because the customer had died, according to the release.
Kilen, 27, would transfer money from the inactive accounts into accounts he could withdraw cash from, federal authorities said. All told, he got away with $138,000 before getting caught.
The long arm of the law caught up with him in California in February and pleaded guilty in May in Tacoma.
Where did IOU Central come from?
A couple days ago we wrote about IOU Central and how they beat CommunityLend to become the first P2P lending marketplace in Canada. IOU Central seemly came out of nowhere. We wrote about CommunityLend last June and then again in December when they secured $2.5 million in funding but had not heard about IOU Central. In Netbank's post about IOU Central Jim Bruene also wrote, "We were surprised to learn today that someone beat Community Lend to market."IOU Central was able to beat CommunityLend to market by purchasing a P2P lending startup from Denmark called Fairrates. Fairrates was built in 10 months by Arkadiusz Hajduk and opened in April 2007. They had lenders willing to invest but had a problem finding and vetting good borrowers. In Denmark there is no access to credit history and Fairrates was hit with a couple fraud cases. Hajduk is now the Product Manager for IOU Central and he spoke at a conference for entrepreneuers in Poland this week. Bartlomiej Owczarek from Virtuous cycle published his notes from Hajduk's speech reprinted here:
Presentation of Arkadiusz Hajduk about his P2P startup (IOU Central):- The startup was initially located in Denmark
- Two guys on a sofa
- I liked the quote - “expert is a person who committed all possible mistakes in a narrow field of specialty”
- Idea was inspired by Prosper
- They didn’t bother with business plans and presentations (note: maybe not so good in the end, given later credit history problem, see below)
- Nevertheless, they got angel from early on - entrepreneur, house builder
- Features of their angel - did call from time to time, but otherwise didn’t require much reporting, in retrospect now they would prefer someone more of a “mentor” type
- They coded for 4 months without office
- Then they got office, at respectable location (good for customer trust)
- They coded another 6 months when they had office
- First version was seen and tested by some 30 people
- Operating model assumed that they don’t make credit decision or take on risk - all this is on the lender
- Highlight of the “growth” period - 90 minutes on the front page of a major business portal
- After launch, lenders turned out not a huge problem; in a first week, one person offered equivalent of ca. PLN 50k
- However, huge problem with (good) borrowers
- Also, in Denmark there is no access to credit history (only yes/no credit problems query possible)
- Side note: banks in Denmark do not care to advertise to people more than 25 years old, because no one ever changes the bank
- They had two evident fraud cases
- In the end, business model didn’t fly because of borrower problem (people took wait-and-see approach), resulting in the “decline” phase
- Luckily, they were approached by people from Canada, who had non-technical capabilities in the area but needed technology platform, and they sold out
- Angel apparently got 150% of his initial contribution
- Lessons learned: don’t hesitate to kill your own ideas
Virtuous cycle also had notes about a couple other P2P lending startups who were also at the conference - Finansowo, Monetto, and Kokos. They all hope to become the P2P lending platform for Poland. Of the three, Kokos is already active. Wiseclerk published an interview with Kokos a couple weeks ago. Finansowo will be launching within a week and Monetto is also close to launch.
Prosper unveils individual portfolio plans and improves search
Prosper rolled out several upgrades to their website ahead of Prosper Days. Last month Prosper lender HollowOak polled lenders on what upgrades might be coming. There may still be new features announced at Prosper Days but here's how we fared so far:
Portfolio Plans for everyone
Now lenders can create their own portfolio plans, with all of the controls available in the existing portfolio plan templates. Existing standing orders have also been converted to portfolio plans, and will include estimated return data (when available) to help lenders make better lending decisions.
Additionally, lenders can now share their portfolio plans on their member page. If you think you have a great lending strategy, share your plan, and other lenders can copy it for their own use (or even tweak it if they think it needs some changes). Building (or just editing) a portfolio plan is easy, and with built-in performance data, you’ll be able to better predict the performance of your plans.
Social criteria added to search
Ever wondered if having verified friends really makes a difference in a borrower’s default rate? Now you can find out, with four new search criteria added to advanced search, portfolio plans, and the marketplace performance page:
Bids from friends ($): Sum of highest single bids from the borrower’s friendsBids from friends (#): Total number of bids from unique friendsEndorsements: Number of endorsements from the borrower’s verified friendsFriends: Number of verified friends the borrower has
Bidding via API
You can now bid via the API with your personal account. Each account must be activated to allow API bidding. Send an email to APIServices@prosper.com to enable API bidding on your personal account.
Prosper expects developers will begin to create applications that make use of this capability; however, at this time, the terms of service on API bidding is limited to individual accounts.
Bid Source available in loan list
The “Your Account > Lending > Loans” page now includes a new column called “Bid source”, which will indicate what the source of each loan was. For example, if you placed a manual bid, the “Bid source” column will say “Manual”. If a loan came from a portfolio plan, the plan will be named in that column.
Lenders can use this to look back at loans made in the past and determine which bidding strategies are working, and which are not.
2nd Loan Criteria Changed
Prosper updated the eligibility criteria for borrowers who wish to create a listing for a 2nd loan, raising the minimum number of recent consecutive on-time payments from 2 to 6 months. This means that a borrower who wishes to take a 2nd loan on Prosper must have had at least 6 months of consecutive on-time payments (pre-payments don’t count) before he or she is allowed to create a listing for a second loan.
“Bank account verified” icon retired
The “Bank account verified” icon has been retired from the site as of this release. Initially, this icon was added to listings because having a verified bank account was the only hurdle to borrowers wishing to have their 100% funded loans originated, and a borrower’s failure to verify his or her bank account could delay the deployment of a lender’s bid. At present, however, bank account verification is just one of many verification procedures that gate a loan’s origination, and bank account verification is rarely the item that prevents origination. In addition, there are many misunderstandings among new borrowers and lenders over what the icon means, when it is activated vs. hidden, and how it affects the funding of a loan. As a result, we have decided to remove the icon from listings, search, and search results. No loans are originated without a borrower verifying ownership of his or her bank account.
Referral award for new borrowers raised from $35 to $50
If you refer a new borrower to Prosper whose loan is funded, you can earn $50 from Prosper. You can also still refer a lender, and both of you will earn $25 when he or she funds his or her first loan.
Washington DC interest rate cap raised to 24%
Prosper has raised the interest rate cap in the District of Columbia from 6% to 24%. Additionally, Arkansas, Delaware, Kentucky, and Tennessee have had interest rate caps lowered commensurate with the Fed’s lowering of interest rate indexes.
The secondary market for loansIncrease in the minimum credit grade that may create a listing- Publication of legal actions against defaulting borrowers - Prosper did announce they would sue select delinquent borrowers. This, however, was not tied to the upgrade last night.
- Increase loans servicing fees - Prosper already raised borrower's fees a couple weeks ago.
Increase state rate caps- Prosper did raise the interest rate cap in the District of Columbia from 6% to 24%. However, Arkansas, Delaware, Kentucky, and Tennessee have had interest rate caps lowered based on the change in federal interest rates.A national Prosper license- Lending Club is national but we are still waiting on Prosper- Increased options on the search loans feature more granular credit data - Search options are improved but it does not feature credit data. Verified friends were added to the search feature.
Credit report from more than one credit reporting agencyReduced minimum bid size- Prosper is at $50. Lending Club is at $25. We found most Prosper lenders do not diversify. In fact, a full 70% have less than 20 loans. A lower minimum bid size would help Prosper lenders diversify.- Lenders can create their own portfolios - Yes! A nice upgrade here.
- Lenders can publicize their portfolios for other lenders to follow - Yes! It can be shared on your member page.
Stock options for long-time lenders3rd loans for borrowers- No, but they did change the eligibility criteria for borrowers who wish to create a listing for a 2nd loan, raising the minimum number of recent consecutive on-time payments from 2 to 6 months.Borrower refinancing their loans directlyRevolving credit loansThe entry of corporate lenders- Globefunder is the best P2P lending option for corporate lenders right now.- Changes (unspecified) to loan verification - Lenders will no longer see the "Bank account verified" icon. Borrowers do not receive a loan until their bank account is verified so Prosper views this as an unnecessary item to publicize. Andrew Martinez-Fonts from Prosper says, "bank account verification is rarely the item that prevents origination."
Streamlined borrowing for AA-B credit gradesEnhancements to the Friends and Endorsements program- No, but Prosper did raise the referral bonus from $35 to $50.Complete elimination of groups
Portfolio Plans for everyone
Now lenders can create their own portfolio plans, with all of the controls available in the existing portfolio plan templates. Existing standing orders have also been converted to portfolio plans, and will include estimated return data (when available) to help lenders make better lending decisions.
Additionally, lenders can now share their portfolio plans on their member page. If you think you have a great lending strategy, share your plan, and other lenders can copy it for their own use (or even tweak it if they think it needs some changes). Building (or just editing) a portfolio plan is easy, and with built-in performance data, you’ll be able to better predict the performance of your plans.
Social criteria added to search
Ever wondered if having verified friends really makes a difference in a borrower’s default rate? Now you can find out, with four new search criteria added to advanced search, portfolio plans, and the marketplace performance page:
Bids from friends ($): Sum of highest single bids from the borrower’s friendsBids from friends (#): Total number of bids from unique friendsEndorsements: Number of endorsements from the borrower’s verified friendsFriends: Number of verified friends the borrower has
Bidding via API
You can now bid via the API with your personal account. Each account must be activated to allow API bidding. Send an email to APIServices@prosper.com to enable API bidding on your personal account.
Prosper expects developers will begin to create applications that make use of this capability; however, at this time, the terms of service on API bidding is limited to individual accounts.
Bid Source available in loan list
The “Your Account > Lending > Loans” page now includes a new column called “Bid source”, which will indicate what the source of each loan was. For example, if you placed a manual bid, the “Bid source” column will say “Manual”. If a loan came from a portfolio plan, the plan will be named in that column.
Lenders can use this to look back at loans made in the past and determine which bidding strategies are working, and which are not.
2nd Loan Criteria Changed
Prosper updated the eligibility criteria for borrowers who wish to create a listing for a 2nd loan, raising the minimum number of recent consecutive on-time payments from 2 to 6 months. This means that a borrower who wishes to take a 2nd loan on Prosper must have had at least 6 months of consecutive on-time payments (pre-payments don’t count) before he or she is allowed to create a listing for a second loan.
“Bank account verified” icon retired
The “Bank account verified” icon has been retired from the site as of this release. Initially, this icon was added to listings because having a verified bank account was the only hurdle to borrowers wishing to have their 100% funded loans originated, and a borrower’s failure to verify his or her bank account could delay the deployment of a lender’s bid. At present, however, bank account verification is just one of many verification procedures that gate a loan’s origination, and bank account verification is rarely the item that prevents origination. In addition, there are many misunderstandings among new borrowers and lenders over what the icon means, when it is activated vs. hidden, and how it affects the funding of a loan. As a result, we have decided to remove the icon from listings, search, and search results. No loans are originated without a borrower verifying ownership of his or her bank account.Referral award for new borrowers raised from $35 to $50
If you refer a new borrower to Prosper whose loan is funded, you can earn $50 from Prosper. You can also still refer a lender, and both of you will earn $25 when he or she funds his or her first loan.
Washington DC interest rate cap raised to 24%
Prosper has raised the interest rate cap in the District of Columbia from 6% to 24%. Additionally, Arkansas, Delaware, Kentucky, and Tennessee have had interest rate caps lowered commensurate with the Fed’s lowering of interest rate indexes.
Instant 5% bonus becomes nearly 12% for one Lending Club lender
Odnal has been a lender on Prosper for awhile and recently started lending with Lending Club when they offered 5% bonus for lenders who invested more than $5,000 by February 3rd. Most of his loans have finally funded and he is very happy with the results. He provides a report on his blog:"...I managed to get the minimum $5,000 invested in a portfolio, as well as an extra $375 from loans that had expired and I resubmitted. The bonus was based on how much you submitted, regardless of whether or not the loans got fully funded and approved or not. That means, the bonus was based off of my portfolios totaling $5,375 for a bonus amount of $268.75.
...When all is said and done, I will have $2950 in loans with a bonus of $268.75. That means, instead of just a 5% bonus, mine ended up at 9.11% of the loans that got funded. If I count my $75 in referral fees ($25 for signing up, $25 for referring my wife, and $25 in her account), I’ve already earned 11.65% on the money I have lent.
So far I like Lending Club."
I seriously considered lending $5,000 but let the time run out. I regret not taking advantage of the 5% bonus offer now. Lending Club - please bring it back!
Prosper under maintenance
"We are currently making enhancements to our site starting at 8:00 PM Pacific, February 22, 2008, and we should be back online by 1:00 AM."
Although I've been hard on Prosper in the past during maintenance outages, they are usually followed by new features. What new features do you think they are working on now? Traveler505 has a nice bit of speculation. Just four more hours to go...
Although I've been hard on Prosper in the past during maintenance outages, they are usually followed by new features. What new features do you think they are working on now? Traveler505 has a nice bit of speculation. Just four more hours to go...
Update: See the upgrades here.
PayPal competitor Revolution Money Exchange offers $25 sign-up bonus
Peer to peer money exchange site, Revolution Money Exchange launched nearly four months ago. At the time, chairman Ted Leonsis said, "We want to become for social networks what PayPal is for EBay." Former AOL chairman Steve Case is behind Revolution Money and hopes that merchants use it to circumvent the traditional fees of 1.9 percent that credit card networks charge.Revolution Money Exchange is aggressively courting new members with a $25 sign-up bonus. They advertise that it takes 24 hours for the $25 to be credited to your account but it took me less than a minute to sign up and a minute later the bonus was immediately available in my account.
Revolution Money doesn't charge many fees. It's free to register, add money, send money, receive money, request money and withdraw electronically to a bank account. There are fees to withdraw money by check or to receive a paper statement.
I'm sold. I'll be using Revolution Money Exchange instead of PayPal. Even if you don't use PayPal it's worth a couple minutes for the sign-up bonus.
Of course, if you haven't signed up for Prosper or Lending Club yet you can also get a $25 referral bonus there too. Some quick math - If you signed up for all three of these services and then referred your spouse you would make a quick $160. Of the three, only Prosper requires that you actually use their service by lending at least $50 to a borrower.
Update (3/26): Revolution Money Exchange has made it easier to get the $25 bonus. Here's the link. After you sign up you can refer others and receive a $10 referral bonus.
Update (2/25): Why does Revolution Money require my social security number?
IOU Central beats CommunityLend to Canada's market
IOU Central just launched as Canada's first P2P lending platform this month. Here's a short YouTube introduction from Phil Marleau, Chief Executive Officer and Founder of IOU Central.
IOU Central appears to be much like Prosper and Lending Club. A borrower can apply for a loan in the amount of $1,000 to $25,000 and for a term of up to 3 years. The lender, on the other hand, can bid on a loan in amounts ranging from $25 to $25,000. One significant difference is IOU Central allows the borrower to choose the term of the loan from 1 to 36 months. There are currently 21 borrowers looking for loans. 11 have received bids so far.
“At its core, IOU Central empowers individuals to be their own banker by giving them a platform to lend money to whomever they want. It’s no longer just your local bank that can earn interest on your deposited money!” said Marleau. “It also gives borrowers an alternative source of funds at competitive rates with no lengthy procedures to go through as are currently required at many traditional financial institutions.”
We expected CommunityLend to be Canada's first P2P lending platform. We first wrote about them last June and then again in December when they secured $2.5 million in funding. CommunityLend's website still reads, "We are moving full speed ahead to make our beta launch available for early 2008 with regulatory work, technical development, and market planning all underway."
Unlike CommunityLend, IOU Central managed to avoid any press until they launched on February 12th. Here's a few links to other articles in the media about IOU Central:
IOU Central appears to be much like Prosper and Lending Club. A borrower can apply for a loan in the amount of $1,000 to $25,000 and for a term of up to 3 years. The lender, on the other hand, can bid on a loan in amounts ranging from $25 to $25,000. One significant difference is IOU Central allows the borrower to choose the term of the loan from 1 to 36 months. There are currently 21 borrowers looking for loans. 11 have received bids so far.
“At its core, IOU Central empowers individuals to be their own banker by giving them a platform to lend money to whomever they want. It’s no longer just your local bank that can earn interest on your deposited money!” said Marleau. “It also gives borrowers an alternative source of funds at competitive rates with no lengthy procedures to go through as are currently required at many traditional financial institutions.”
We expected CommunityLend to be Canada's first P2P lending platform. We first wrote about them last June and then again in December when they secured $2.5 million in funding. CommunityLend's website still reads, "We are moving full speed ahead to make our beta launch available for early 2008 with regulatory work, technical development, and market planning all underway."
Unlike CommunityLend, IOU Central managed to avoid any press until they launched on February 12th. Here's a few links to other articles in the media about IOU Central:
- IOU Central's media page
- Netbanker: IOU Central Launches First P2P Lending Exchange in Canada
- WiseClerk: IOU Central Launches P2P Lending in Canada
- TMCnet: Person-to-person loans finally come to Canada with the first online lending marketplace: IOU Central
- StartupNorth: IOU Central - Canada gets its first Peer to Peer Lending Company
Update (2/22): According to Financial Post, "In its first week of operation, IOU Central's Marleau said they have $10,000 deposited in investor accounts and a total of $75,000 in requests for borrowing."
Lending Hub develops P2P Loan Platform for Australia
Lending Hub is a Sydney based private company that is building the first online peer to peer platform for Australians who want to borrow online and people with some spare cash who want to invest in the new asset class – online fixed income personal loans.The Australian banking industry has shown significant restructuring of its banking industry over the past five years with the trend being set initially by new entrants in the field of home mortgage broking then the rise of non-conforming loan providers and now peer to peer banking has reached Australia.
This dynamic activity has been led by the five large banks (Commonwealth, ANZ, National, Westpac and St George) that have aggressively competed for market share in the home loan market. However with the recent decline of the property boom in Australia the focus has now shifted to other sectors such as car financing and person loans for which there has been a much more limited product choice for consumers. Combine this opportunity with the strong dislike Australians have of dealing with banks and the significant number of potential borrowers who are unable to obtain loans through the larger banks (the large banks are highly risk averse) and it becomes obvious that Australia is an ideal market for a Social Lending platform that can cut out the banks.
Lending Hub is set to tap into the personal loans market in Australia with a targeted launch in early 2008 and will focus on delivering lower interest rates to borrowers across a broader spectrum of credit grade loan applicants. Ivan Mantelli, the founder and Managing Director of Lending Hub sees the opportunity as being about delivering a revolutionary alternative loan choice to borrowers in terms of - a new product, interaction with the Lending Hub community and ‘first in the market’ online loans provider. The Lending Hub team, led by Ivan Mantelli who has a background in new business start-ups, investment banking and business strategy, comprises a group of entrepreneurs who have a vision to build a truly social and useful site for Australians that can deliver Social Lending outside of the typical banking format.
P2P Lending Carnival #4
In June of last year I reviewed the top Prosper blogs. Since then, the number of bloggers covering P2P lending has increased significantly and the content covers much more than just Prosper. I'm proud to host the 4th edition of the P2P Lending Carnival. There are a huge range of articles in this edition including some heavy anti-P2P lending posts. Prosper, Lending Club, Lending Hub (Australia), Kiva, Virgin Money, and IOU Central (Canada) are covered. We have posts from borrowers as well as lenders. So enjoy...this represents the "best of" P2P lending articles over the last 2-3 weeks. Past editions have been hosted by Lazy Man and Money, Brip Blap, and Rateladder.
6 Ways To Manage The Risk of Peer to Peer Lending - This is a post by SVB on the official Prosper Blog. She wants to make the leap into P2P lending and takes a look at how to overcome her risk aversion. She has some great tips. I look forward to following her story as she starts lending.
5 Ways to Help Get a Prosper Loan Funded - Jacob from Early Retirement Extreme has lent out more than $12,000 over the past 18 months and has a few great tips for borrowers.
Is Person to Person Lending Safe? - Cash Money Life responds to reader's questions about the safety of P2P lending. "Just like any other investment," he writes, "you need to do your research to determine the level of risk you are willing to assume and the percentage of your portfolio you are willing to invest."
Peer Lending Lessons From the Dating World - In case you missed it, the CEO of Lending Club, Renaud Laplanche, was interviewed on CNBC's Power Lunch. During the interview, a comparison between P2P lending and dating was made. Money $mart Life discusses the comparison and offers some "peer lending 'dating' tips" of his own.
Get a Better Rate for Your Small Business Loan from Virgin Money - Ben takes a look at the story behind Richard Branson's purchase of Circle Lending and its rebranding into the Virgin Money empire.
Prosper vs. Lending Club SmackDown–Who has the best interest rates? - The Dough Roller makes a detailed comparison of the interest rates at Prosper and Lending Club from the borrower's perspective. DR writes, "How they set interest rates is fundamentally different. Prosper follows an EBay auction style format...Lending Club sets the interest rate based on a formula...there is no bidding." DR finally concludes, "Whether you are a borrower or lender, the starting place should be to determine the interest rate you would pay or receive at Lending Club....At present, I suspect that many Prosper lenders are underestimating the risk of default, which results in better interest rates for borrowers at Prosper, and better interest rates for lenders at Lending Club." This is a well researched article and the best comparison I've seen so far. The comments are very good as well. As Don points out in the comments, Prosper uses ScoreX Plus from Experian which differs from the FICO credit score Lending Club uses so a strict comparison can't be made between the two when looking at interest rates. For more Prosper bidding tips take a look at Matt's article about when to bid on a Prosper loan.
6 Ways To Manage The Risk of Peer to Peer Lending - This is a post by SVB on the official Prosper Blog. She wants to make the leap into P2P lending and takes a look at how to overcome her risk aversion. She has some great tips. I look forward to following her story as she starts lending.
5 Ways to Help Get a Prosper Loan Funded - Jacob from Early Retirement Extreme has lent out more than $12,000 over the past 18 months and has a few great tips for borrowers.
Is Person to Person Lending Safe? - Cash Money Life responds to reader's questions about the safety of P2P lending. "Just like any other investment," he writes, "you need to do your research to determine the level of risk you are willing to assume and the percentage of your portfolio you are willing to invest."
Peer Lending Lessons From the Dating World - In case you missed it, the CEO of Lending Club, Renaud Laplanche, was interviewed on CNBC's Power Lunch. During the interview, a comparison between P2P lending and dating was made. Money $mart Life discusses the comparison and offers some "peer lending 'dating' tips" of his own.
Get a Better Rate for Your Small Business Loan from Virgin Money - Ben takes a look at the story behind Richard Branson's purchase of Circle Lending and its rebranding into the Virgin Money empire.
Is Peer to-Peer Lending Ready for Prime Time? - Moolanomy considers P2P lending "riskier than the stock market" but thinks there is still the potential to earn money as a lender.
Prosper Taxes and Prosper Taxes: Help Me… Help You - Rateladder and Lazy Man both take a look at the confusing tax situation for the various forms of income and loss including interest, defaulted loans, late fees, referral rewards, collection fees, service fees and group leader rewards.Prosper vs. Lending Club SmackDown–Who has the best interest rates? - The Dough Roller makes a detailed comparison of the interest rates at Prosper and Lending Club from the borrower's perspective. DR writes, "How they set interest rates is fundamentally different. Prosper follows an EBay auction style format...Lending Club sets the interest rate based on a formula...there is no bidding." DR finally concludes, "Whether you are a borrower or lender, the starting place should be to determine the interest rate you would pay or receive at Lending Club....At present, I suspect that many Prosper lenders are underestimating the risk of default, which results in better interest rates for borrowers at Prosper, and better interest rates for lenders at Lending Club." This is a well researched article and the best comparison I've seen so far. The comments are very good as well. As Don points out in the comments, Prosper uses ScoreX Plus from Experian which differs from the FICO credit score Lending Club uses so a strict comparison can't be made between the two when looking at interest rates. For more Prosper bidding tips take a look at Matt's article about when to bid on a Prosper loan.
7.2M In January Prosper Loans, But How About February? - Mike from Prosperous Land takes a quick look at recent loan stats. He is one of my favorite Prosper bloggers and I'm glad he started posting more often. For a look at two of his articles about recent Prosper drama read Prosper Approaching Nuclear War and Junk Mail Seller Revisited.
Lending Club Loan in Review - LuLu, a college student, borrows money from Lending Club and pays off her Discover Card, Citi Card and consolidates other debts.
IOU Central Launches P2P lending in Canada - WiseClerk, the best site for information about international P2P lending, takes a look at Canada's first P2P lending service.
My Opinions on P2P Lending - Ana rants against P2P lending. "I don’t think P2P lending is a good idea at all, not only for philosophical reasons but also for practical reasons," she writes. She feels these sites encourage unhealthy debt and would even avoid being a lender to avoid the ethical dilemma of "slapping those chains of debt onto another person."
Why I Started Lending Money With Prosper And Lending Club - After seeing the rates drop on his high yield ING savings account, David from My Two Dollars is turning to P2P lending.
Peer to Peer Lending: Neat Idea, Bad Investment - Adfecto thinks that bonds or the stock market are better investment options due to high default rates. He says, "I started out very excited and the more I learned, the more I ran the other way." Adfecto, I'd be interested in your comments on Matt's risk management article.
P2P Borrowers: The Greatest Tenants You Can Find - Mike compares a peer loan to a real estate investment. He writes, "I have come to think of the people I loan money to as the ideal tenants for my virtual real estate business."
Pennsylvania loans or what were early Prosper lenders thinking? - Brett takes a look at the high rate of defaults on Pennsylvania loans. We have also wondered about Pennsylvania in the past. In addition, Brett looking for some help critiquing his new Prosper portfolio.
How to Write a Good Application for a Personal Loan - The Lending Hub (not to be confused with the Lending Club) is a new P2P lending start-up in Australia. They share some tips on how to write a good loan request as a borrower. Their tips are solid and apply no matter what company you are seeking funding from or what country you are in. Stay tuned...later this week we will have a guest post from Ivan, Lending Hub's CEO.
Thanks everyone for submitting articles. If you want to be included in Lending Carnival #5 you can submit your blog post here.
Loanio nears launch...again
We first wrote about a new peer to peer lending startup called Loanio back in July 2007. At the time, there was little information available. Since then, Loanio has advertised extensively on P2P lending blogs and websites but they are still pretty quiet about their actual plans. As far as I know, the only time Loanio has talked to bloggers or the press has been the short interview Loanio CEO Michael Solomon gave me back in August. At the time, they were hoping to launch in the fall. Fall came and went and a notice on Loanio's homepage said they would open in January 2008. I eagerly visited their homepage almost every day last month hoping to get a first look at their new service.Loanio is now in beta testing and, according to an email from Michael Solomon, is still a couple of weeks away from opening up testing to non-team developers. We hope to be invited to their beta testing and will bring you some early screen shots and a review.
Update (9/10/2008): Loanio screenshots
Prosper offers $130K for senior software engineer
Prosper is searching for a senior software engineer who is a "good .Net generalist" with experience in C#, SQL Server, Visual Studio, and ASP.NET. This is a full time position with a salary in the range of $100K to $130K and stock options. In their help wanted ad they say, "The web team is 6-7 people right now, so everyone has an impact from day one. We release code every six weeks, and do a lot of experimentation, so your work isn't getting delayed for months and then shelved at the last minute."
Although I have before, normally I don't post help wanted ads for Prosper. This job is interesting, however, because it is not listed on the Prosper jobs page and is written much more informally. For example, the dress is described as casual but "you still need footwear, we're not THAT casual." You won't see that on their official job board. Read more on 43folder's job board.
Other open jobs at Prosper include
Although I have before, normally I don't post help wanted ads for Prosper. This job is interesting, however, because it is not listed on the Prosper jobs page and is written much more informally. For example, the dress is described as casual but "you still need footwear, we're not THAT casual." You won't see that on their official job board. Read more on 43folder's job board.
Other open jobs at Prosper include
- Product Manager
- QA Engineer
- Senior Accountant
- Senior Systems Administrator
- VP, Institutional Lender Development
Lending Club is also hiring. They have four openings right now:
Zopa US is looking for help. They are looking for a web developer, financial systems developer, and senior credit officer. They are also looking for rapid growth in the coming months. On their jobs page they say, "We're going to need folks in many different roles here, particularly in marketing and product management, within the coming months (but not right now)."
P2P lending carnival #4 next week
There are about 48 hours left to submit articles to P2P Lending Carnival #4 which will be hosted here on PLR. Submissions will close on Monday, the 18th and the results posted later in the week.
Link to submit an article: http://blogcarnival.com/bc/submit_3148.html
Past P2P Lending Carnivals:
P2P Lending Carnival #1 on Lazy Man and Money
P2P Lending Carnival #2 on Brip Blap
P2P Lending Carnival #3 on Rateladder
P2P Lending Carnival #4 will be posted next week here on Prosper Lending Review
Update (2/21): It's up...P2P Lending Carnival #4
Link to submit an article: http://blogcarnival.com/bc/submit_3148.html
Past P2P Lending Carnivals:
P2P Lending Carnival #1 on Lazy Man and Money
P2P Lending Carnival #2 on Brip Blap
P2P Lending Carnival #3 on Rateladder
P2P Lending Carnival #4 will be posted next week here on Prosper Lending Review
Update (2/21): It's up...P2P Lending Carnival #4
JessM in trouble with the law again
Prosper's most notorious borrower, Jessica Wolcott, or JessM, is in trouble with the law again. Two months ago she was sentenced to 21 months in jail after trying to extort $125,000 out a Pepsi Bottling Executive. Her jail time is not scheduled to begin until April 1st.While waiting for her sentence to start Wolcott was stopped for speeding on January 31st with a revoked license. In addition, the trooper found an envelope with $10,000 in cash that "responded positively" to a drug-sniffing dog.
A federal pre-trial officer is urging that Wolcott be ordered to being her sentence on the extortion charge immediately.
She has a $20,000 loan through Prosper.
Update (2/14): NYC judge revokes bail for Jessica Wolcott and demands she start serving her 21-month sentence immediately.
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