| By Jim Bruene on December 18, 2007 11:41 AM | Comments (1) |
For much of the past four or five weeks I've been researching and testing person-to-person lending sites. I've become a lender and have gone through the borrowing process at all three major U.S. P2P lending exchanges: Prosper, Zopa, and Lending Club. Plus I set up friends and family with loans at Virgin Money USA and LoanBack.
It was all part of the research process for the latest Online Banking Report entitled, Person-to-Person Lending 2.0: Disruptive service or market niche? That report is now available at our main website (here).*
I had originally intended on publishing it in early December. But as I was trying to wrap things up, Zopa launched its new U.S unit. So I stopped the presses and added an analysis of its unique model. Then as I was finishing that, Lending Club made a significant change last week, becoming a national lender instead of state-sanctioned one. That too is now in the report.
Here's a summary of the major fourth quarter activity in the person-to-person lending sector:
- Oct. 2: Prosper overhauled a number of its lending tools, which were announced at our FINOVATE conference Oct. 2 (video here)
- Oct. 6: Virgin Money (formerly CircleLending) launched its revamped friends-and-family service with a splashy debut in Boston with Virgin founder Richard Branson leading the parade (coverage here)
- Dec. 3: Zopa launched its U.S. version, an entirely new way of looking at the P2P space (coverage here)
- Dec. 13: Lending Club went national in a unique partnership with WebBank
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*Subscribers may download the report free of charge.
Others may purchase it as an individual report.
Some P2P communities host discussion boards that seem to encourage what appear to be strong "phishing clubs". I saw that some P2P companies have not put up boards at all.
This seems to be a weak spot for P2P investing. The community model can be attractive to smaller investors as well as weaker borrowers because it is a dynamic and inexpensive marketting tool, but if there is no protective coating around the smaller players when the phishers and poachers cruise in, how can they survive?
I mean, with $1,000 to play with, if I throw it into day-trading at least I'm not risking my business and everything else to the kind of libel and character assasination I have seen happen in poorly-moderated boards.