Canadian regulators have given the greenlight for the country's first peer-to-peer lending platform for consumer loans.
The Canadian Securities Administrator has given goPeer permission to operate in Ontario and Québec, enabling the startup to take on traditional banks in the lending market.
GoPeer aims to cut out banks and other intermediaries, connecting credit-worthy Canadian borrowers with eligible investors.
Borrowers complete a five minute application online and get a decision back within 24 hours. They can then borrow up to $25,000 with an APR from 7.5%. Investors can lend as little as $10 per loan, diversifying their investments across multiple borrowers.
Marc-Antoine Caya, CEO, goPeer, says: "GoPeer is on a mission to improve Canadians’ financial well-being by eliminating market inefficiencies and increasing transparency in the consumer lending process.
"Automating the archaic and laborious loan underwriting process and investor compliance requirements allows goPeer to deliver a seamless experience and better rates to its members.”
Although goPeer is the first of its kind in Canada, P2P lenders have been operating in the UK and US for well over a decade.
In the US, firms such as Prosper and Lending Club quickly pivoted to institutional investors to fund loans, a model that saw the money dry up. UK pioneer Zopa kept a more faithful approach but took 11 years to hit profitability before promptly applying to become a bank.