CommunityLend to set up online P2P loan exchange in Canada

CommunityLend to set up online P2P loan exchange in Canada

Social lending platforms Zopa and Prosper are about to be joined by a third company, CommunityLend, which will target the Canadian personal loan markets.

Zopa, which first set up in the UK two years ago, and US copycat Prosper operate online marketplaces where people congregate to lend and borrow money.

The team behind CommunityLend - which includes noted banking blogger Colin Henderson - is currently working on a preview site where prospective users will be able to simulate the social lending process, including setting up loans and bidding on auctions, without the exchange of real money. The fully functioning exchange will go live later in the year.

"The appeal of the CommunityLend service will be its unique ability to provide better rates to all participants as well as the added benefit of bringing a human aspect to the process of lending," says the company in a statement on its Web site. "Everybody wins but the middlemen. Our mantra is that the community wins because we’re a better lending and borrowing vehicle than the banks, credit card companies and payroll lenders."

Peer-to-peer social lending networks like Zopa represent a serious threat to the traditional banking industry, according to research carried out by the Social Futures Observatory.

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.

Zopa currently claims more 135,000 members and a default rate of 0.2% on total loan values running into the hundreds of thousands pounds sterling.

In November, Prosper said it had signed its 100,000th member and presided over $20 million in loan agreements in its first six months of operation.

Comments: (0)