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)