Furthermore Zopa has a referral promotion in July. Zopa pays 100 GBP (approx. 165 US$) to members that refer a borrower who successfully gets a loan in July.

Furthermore Smava profited form TV exposure, which also helped its competitor Auxmoney to achieve a record month with approx. 130,000 Euro loan volume.

In international comparison by p2p lending loan volume funded per month, Smava is in the top 5 behind Virgin Money, Kiva, Zopa UK and Lending Club.

(Source: Smava p2p lending stats; A-H are credit grades)

(via Finance 2.0)

MYC4 has reacted. In future there will be no origination fees and only fees on the interest of the repayments. This uis a step in the right direction as the interests of MYC4 are now more aligned with the interests of the lenders. To make or increase profit MYC4 has to avoid and decrease defaults.

Quote of the announcement:

We have made a strategic decision with regards to the way MYC4 earns money by removing “closing fees” and only charging “interest fees” on the loans, when they are being repaid. That means that we put ourselves on the same side as the Investors on MYC4 only earning money when the Borrowers repay their loans.

With this change we want to signal that we believe strongly in the viability of the Businesses, and to align MYC4 earning with the earning of the investors and similar to investors be affected by any defaults and currency fluctuation.

Concretely, MYC4 will change the current income structure, where the Borrower is charged a flat fee of 2% of the loan amount, payable only when the loan is actually disbursed, and an additional fee of 2% (interest spread) when the loan is repaid on the basis of a declining balance. This corresponds to a total fee to MYC4 of approx. 3 percent of the total loan amount.

Instead, we will charge 6% interest commission. Considering a 12-month loan time, this 6% charge matches the 2% on initial balance plus the 2% on outstanding balance fees. The change will in most cases be neutral for the borrower.

In the same line, MYC4 encourages our Partners to shift their income from closing fees to repayment (interest) fees to show their belief in the quality of their portfolio towards investors. However, our Partners are not obligated to change their income structure, so it is up to each of them if and when they will change due to for instance their cash-flow situation.

As P2P Lending is a very new and emerging field there are very few experts who have gathered previous practical experience in this field and these are highly sought after. One example is Arkadiusz Hajduk, who founded Fairrates in Denmark, then worked for IOU Central in Canada and now works at Smava.pl in Poland.

This quote from Loanio’s recent  SEC S-1 filing shows how critical it is for p2p lending companies to find ideal candidates:

Competition for personnel and employees is intense, and we may not be able to attract and retain the highly skilled individuals whom we need to support our business.

Competition for highly skilled technical and financial personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for experienced personnel and employees have greater resources than we have and may be able to offer more attractive terms of employment.

In addition, we invest significant time and expense in training our staff members, which increases their value to competitors who may seek to recruit them. If we fail to retain our personnel, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve Loanio borrower, co-borrower and lender members could diminish, resulting in a material adverse effect on our business.

The surge in user demand led to a 20% increase in active lenders at Auxmoney and most ever parallel open loan listings (currently 332). At Smava nearly all reasonable loan listings are funded within a few days or even hours at the moment.

To encourage more loan listings Smava has upped the bonus for inviting new borrowers to 150-200 EUR (approx 200 to 275 US$) for each referral of a borrower that is success fully funded (up from 100 Euro before).

On listed loans at Kiva there will be a new information status on the “about the Loan” Section under “Currency Exchange Loss”. The status will either be:

• “Covered”: Meaning the MFI covers any losses (like it has been in the past)
• “Possible”: The MFI has opted for the new rule - the lender covers currency losses above 20%

I browsed some new loan listings today - most are still offered under the “covered” rule, one example of a loan under the new “possible” rule is this Tajikistan loan.Here is a Kiva video on the merits of currency protection.

I do wonder if it will be sustainable to burden part of the currency risk on the lender while at the same time he gets no interest and takes the default risk.

(Chart by sl75, source)

In the new SEC filing Loanio wants approval for offering 50 million US$ in notes based on peer to peer loans via their website Loanio.com. The filing includes the outlook for a secondary market (loan trading platform via a broker) and the plan that Loanio might partner with a “national financial institution”. Should that be achieved, borrower loans could be originated through this lending institution and then sold and assigned to Loanio. This would allow Loanio to offer loans to borrowers in more than the 22 states it has individual state lending licenses for now, and would eliminate (some) state interest caps.

The filing also gives insights into the company structure and expenses since foundation. Founder Michael Solomon hold 97% of the company shares.

Under the requirement to file with the SEC, starting a peer-to-peer lending company in the US market takes an unusual long pre-launch phase compared to other internet based business models.

Lending Club already completed the SEC approval process, while IOU Central and Prosper currently undergo this process. Pertuity Direct operates under a p2p lending model with a different setup.

FOR IMMEDIATE RELEASE
May 19, 2009

Lindeen: Unregistered Securities Will Not be Tolerated in Montana

State Auditor Reaches Agreement with Prosper Marketplace Inc.
Over Sales of Unregistered Securities

(Helena) State Auditor and Commissioner of Securities and Insurance Monica Lindeen today sanctioned a San Francisco company whose unregistered securities schemes defrauded nearly $400,000 from Montana investors.
Lindeen’s office signed a final Consent Agreement and Order with Prosper Marketplace, Inc., a San Francisco-based online “peer-to peer” lending service, to resolve matters relating to unregistered securities and securities fraud.
“My message is clear,” Lindeen said. “If you prey on Montana investors with unregistered securities schemes, or seek to profit from duping unsuspecting Montanans we will find you and we will punish you.”
Prosper has sold 4,479 notes to Montana residents for an aggregate investment of at least $396,510. Lindeen said the notes issued by Prosper are securities, but they were not properly registered for sale. All securities sold in Montana must be registered with the Montana State Auditor’s Office before they can be sold to the public.
During the investigation of Prosper, it was determined that the firm also failed to provide investors with necessary information, such as its financial statements.
Under terms of the settlement, Prosper agreed not to offer or sell any securities until it is in compliance with Montana’s securities registration laws. The order also requires Prosper to pay a fine of $2,214, representing Montana’s pro-rata share of a $1 million settlement negotiated by a multistate working group of state regulators formed by the North American Securities Administrators Association (NASAA).
Prosper provides a private online lending “marketplace” that allows prospective borrowers and lenders to find one another. Through its website, Prosper conducts an electronic auction to fund unsecured promissory notes. The website features a list of potential loans and investors bid against each other to finance the loans. Funds from the lowest bidders are pooled together to fund the loans. Prosper issues notes to those lenders funding the loans and services that note.
Several states had been investigating Prosper’s activity last year and were considering or preparing enforcement actions. In mid-October 2008, Prosper stopped issuing new loans and accepting new investors while it sought registration with the U.S. Securities and Exchange Commission.

…

(Source: Metnet.mt.gov)