CommuntyLend: a new player in social lending

CommunityLend to set up online P2P loan exchange in Canada, article found on finextra on 09 March 2007.

Social lending is booming: the concept in based on Peer-to-Peer technology, enabling people to lend & borrow money without the middlemen (the banks). The appetite for this service seems big in the UK, banks making huge profits and customers failing to see the benefits.

Some researchers even see Peer-to-Peer/ social lending networks as a serious threat to the banking industry.
"The study finds that 74% of Britons would consider borrowing or lending through an online "social lending" community, and that as many as 61% don't trust their banks."

Key players in Social Lending


   

The first company in the social lending space was Zopa in the UK, launched 2 years ago, followed by Prosper in the US. Now, there is another serious player in Canada, named CommunityLend.

The team behind CommunityLend is currently working on a preview site, and plans to launch the website with all the features later this year. I look forward to testing this new online marketplace, and see how it compares to Zopa or Prosper. Indeed, those two websites have both a proactive, dynamic, and committed community. They have already significantly improved their platform, and they have succesfully build trust and showed their members they listen and take care of their suggestions.

With Zopa coming to the US soon, and Prosper doing remarkably well, it is going to be a tough challenge for CommunityLend, especially if they desire to grow the business outside Canada...

A few figures
* Zopa: over 135,000 members and a default rate of 0.2% on total loan values running into the hundreds of thousands pounds sterling (March 2007)
* Prosper: over 100,000 members and presided over $20 million in loan agreements in its first six months of operation (November 2006)

Other players
Fygo, GlobeFunder

Interview - Chris Larsen, Founder & CEO at Prosper.com

Earlier today, I received an email from Min Liu on behalf of the iinovative team. Min read my post about Prosper, and she thought I might be interested in their interview of Chris Larsen, CEO of Prosper.com, the leading social lending marketplace in the US.
Thanks for your email Min.

I found the format of the interview dynamic, and the content useful.
Please find below the agenda of the 10mn audio podcast:
1. Vision and story behind prosper
2. Challenges and risk of building a start up in a highly regulated environment.
3. New trends in web 2.0 concerning transparency and privacy

Quotes & Comments
Please find below some remarks from Chris:
* Good tagline: "Prosper is the ebay for money"
* Concept: everyday people can post a listing looking to buy money, prosper verify the listing and "risk grade" them. It gives lenders a higher return on their investment.
* Break out: "on of the key break outs for prosper is that any american can borrow money", the minimum is $50
* Prosper and the banks: they are not trying to kill the banks. "It is an open market", and Prosper would welcome the banks.
* Risk: "this is not only about great technologies", they also need experts in regulatory complexities
* Web 2.0: Prosper tries to build on the web2.0 concepts: "putting the power in the hands of people" I like Chris description of the web 2.0 concept.
Prosper is "controled entirely by people", it is "a serviced infrastructure", they provide the tools and people participated in this economic democracy.
* New trends in web 2.0 concerning transparency and privacy: "the new trend in the social networking world is to reveal more about yourself". The question is "how comfortable will people be in revealing themselves for benefits?"
There is a fine line between privacy & transparency. It is a constant trouble in our society: people want to be free AND Safe.
* Freedom for its members: they let anybody make a posting (good or bad), members make their own decision whether is good, bad or inappropriate. "Trust people are good, and markets are free".
Prosper offers transparency and equal access.

Community: Prosper is commited to build trust
A social lending marketplace can only be successful with the commitment and enthusiasm of its members. Zopa and Prosper are both working with their communities to make their platform better.
Prosper reached a critical mass of members: "now, we have enough community members (60,000 members)", "they give us constant feedback", Prosper asks for feedback, the Prosper team will even meet with their members in SF in March.
Chris knows what needs to be done, now his team has to deliver: He is commited to build trust.

First speaker from Europe!

If you visited my blog recently, you must be aware of the online_banking_summit_2007 organized by the Royal Media Group in Charlotte, North Carolina.

In any case, I was planning to fly all the way to Charlotte to attend that exciting event next week.

But before registering, I decided to contact JJ Hornblass, CEO of RMG.
I invited JJ to check my linkedin profile and my blogs (Visible Networking & Visible Banking) about social networking, web 2.0 and online banking.

Being visible online works, and it creates opportunities: I am extremely pleased to announce that JJ invited me to be part of the "New Frontiers Panel" on Tuesday 13 March. How exciting!

I also plan to cover the event on my blog.

It is still possible to register. I look forward to meeting with you next week!

Social lending: videos on Zopa & Prosper

Interested in P-2-P and Social Lending? I invite you to check the videos on prosper.com and the videos on zopa.co.uk, available on YouTube.

Zopa


Prosper

Social Lending & Web 2.0

Social lending players
Zopa, Prosper (previously known as circleone), CircleLending, Fygo

 





Other P2P players
LoanBack, Kiva, GlobeFunder

Social lending: analysis and reviews of Zopa & Prosper
* Social lending the next Web 2.0 phenomenon - Part I

Articles
* Big-bank confidence dented by social banking
* Internet social lending 'may threaten banks'
* Press Release: Social lending the next Web 2.0 phenomenon
* Prosper Launches - Social Lending
* Social lending 'increasingly attractive'

Studies & reports
* Internet Based Social Lending (2006)
* Person-to-Person Lending at Prosper (13 Mar 2006)
* Online Lending v5 - part 2 (31 Jan 2006)

Comments
Listening to the market, in that case to the internet users, is always very beneficial. I invite you to check the comments left on the articles you found in this post!