Peer lending going nowhere?
Reports claim that peer lending services such as Prosper, Zopa and Lending Club are going literally nowhere due to the financial crisis.
Even though it has a lot to do with SEC approval, I still find developments somewhat interesting. Because you would think that in a time of financial crisis and banks tightening the credit on a lot of people, there would be a bigger demand for other sources of lending.
But maybe people, who were supposed to lend the money to others, simply don’t have any themselves? Or they might be scared that they are never going to get them back? Not good to know.
What I do think however is that this isn’t the time to dispel the opportunity in peer lending. There is still amble opportunity out there, and services such as Kiva and MyC4 are doing a great job at giving people an opportunity to provide aid to the third world through micro lending. I just think the services are stuck right now because people are panicking. It will blow over.
Vad NU! is a consultancy company owned by Mads Kristensen and specialized in helping clients take advantage of the business opportunities created by new media. Click to learn how I can help you and your company.
5 comments
Lending Club got SEC approval, is operational and created the first secondary market for p2p loans, while Prosper and Zopa are closed. p2p lending will work, the market will decide which model works best: http://online.wsj.com/article/SB122452677967050867.html?mod=googlenews_wsj
Jason, thanks for your comment. I know Lending Club has got SEC approval, but I still think it’s funny how the P2P capital market seemingly dries up and follow suit with the banks. You should think that this would be the very time where people looking to make a profit from lending to others, would get into the game and not watch as bystanders, wouldn’t you? I agree with you that the overall model will work. I’m just curious about the timing.
I am absolutely convinced that democratized banking services are here to stay. It is a transformational technology and business model that will forever change the way people access capital. We can only guess which business models will work in the long run. I am betting on the ZimpleMoney model - but I may be wrong and will always have the right and hopefully the insight to change it when or if necessary.
We are looking to launch within the next 30 days with the first of several free and paid product releases.
Steven Rabago, ZEO, ZimpleMoney.com
Mads,
This is an intriguing blog, explain to me more about what you do (you can send me direct email)…
On the peer-to-peer side of things, we will be launching a new p2p platform soon that is dedicated solely to payday style loans. YadYap is payday spelled backwards because we have the intention of changing the industry up a bit. At first you may think it sounds crazy, but the payday loan industry has already been proven online and offline. There is a link to our blog on our website (just a splash page right now). I am curious to see what you think.
It will work, if done right, and if the lending criteria are different from what banks and other traditional financial institutions use.
For example, 40billion.com is a site that helps entrepreneurs raise money for their small businesses through friends and family, rather than through traditional financial institutions. It is the first friends-and-family funding network for entrepreneurs. Using the Internet-based service, entrepreneurs connect with their social networks - friends, family, friends of family, colleagues, and others – to raise capital by requesting loans and contributions, and entrepreneurs can share their fundraising pages on MySpace and Facebook too. 40billion.com’s scalable platform facilitates the funding requests and generates customized loan documents to make it easier for an entrepreneur to manage many investors (lenders and donors), who can provide $50 to $10,000 each.
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