Quotes From #LenditEurope: About China’s 2,000 Lending Platforms & More

Samir Desai and Peter Renton at Lendit Europe 2015

Part II: Seen & Heard at Lendit Europe

If you missed attending Lendit Europe, you missed a great event. You can catch up on a selection of presentations on Lendit . For short skimming, we’ve selected a few thought-provoking quotes from day 2. You may also check the ones from day 1 here.

About China

Crowdcredit-teamHenry Yin, Managing Director, CreditEase: “There are more than 2,000 P2P lending platforms operating in China. The 50 largest ones account for more than 50% of the total loan balance. Around 700 went bankrupt this year.
Up to recently when the Chinese government has started to regulate this, there were two main types of fraud: The “runaway platform,” which is people simply disappearing with the money, and the “self-funding platform” whereby fraudsters create fictitious borrowers to collect money for their own flailing business.”

About regulation

Christopher Woolard, Director of Strategy & Competition, Financial Conduct Authority: “The FCA has a topline agenda which is to promote competition in financial markets. This makes us very different from any other regulator”

 

David Hanf, CFO, Smava: “The Trusbuddy incident is not system relevant but it is a wake-up call that we need to establish a couple of compliance rules about how to handle accounts”

Panel-EGLY-Johnen-Tomberg-Hanf-Steinkuehler

Charles Egly, Co-founder & CEO, Prêt d’Union: “We’re now reporting to three regulatory bodies as a Credit institution, as a Investment Services Provider, and now to the ECB. Being heavily regulated is a burden, but it’s also giving us a seal of approval that reassures institutional investors”

 

Adrien Wiart, Cofounder & COO, Finsquare:  “We wished the French government would take a leaf from the UK government and act on two fronts by directly investing in crowdlending and issuing a more favorable tax regulation for lenders. Allowing lenders to lodge their loans into an ISA and now to deduct their losses really helps the UK market blossom”

About Cross-Border Business

Matthias Knecht, Cofounder & MD, Zencap, “Whatever the market, leading marketplaces such as AirBnB, Uber or eBay are global businesses … Taking its business across borders is the most important step a lending marketplace can take”

Knecht-Zencap

Tomoyuki Sugiyama, CEO, Crowdcredit: “We want to offer to the Japanese middle-class the ability to lend in Japanese Yens to borrowers from Europe and emerging economies in order to hedge their currency risk”

Twino-team

Ieva Ozolina-Berzina, Head of marketing, Twino: “As a large consumer lending firm with a presence in 6 countries, our mother company Finabay does not regard its P2P lending arm Twino as a cannibalization threat but as way to expand”

About the ability of lending platforms to cope with a potential crisis

Partel Tomberg, Cofounder & CEO, Bondora: “How are we going to cope in case of a coming recession? Most of the markets we’ve been operating in have been in recession for quite some time. Thus, I guess we know a few things about operating in an economic crisis”

 

Giles Andrew, Cofounder and Chairman, Zopa: “I don’t want to sound complacent, but if there is a next recession, our lenders are likely to find that we’re the most recession-proof asset class”

About the future of marketplace lending

Boezeman-Lendinvest

Bart Boezeman, CMO, Lendinvest: “The UK mortgage market is a 1.2 trillion pounds market. It’s huge. Thus, we’re looking forward to a continuing success in the property crowdfunding space”

 

James Meekings, Cofounder and UK MD, Funding Circle: “We are in a category defining sector that is going to change the entire banking system. Our goal is to reach £100 billion in 5 years”

Rhydian Lewis-Ratesetter

Rhydian Lewis, CEO of Ratesetter: There is an official base rate set by the Bank of England, an interbank rate set which is the rate at which banks trade, and the Ratesetter rate which is a true retail rate, the real rate at which people trade in real time… in 5 years, it might be considered the norm”

 

Kevin Caley, Thincats, “As P2P becomes mainstream it could be absorbed into the system and disappear forever “

About Institutional Investors

Bill Kassul, Partner, Ranger Capital “As Institutional investors what we’re looking for in a lending platform, next to underwriting and servicing skills, is a unique customer acquisition model that is cost effective and can scale”

 

Anil Stocker, Cofounder & CEO, MarketInvoice: “Institutional investors interrogate what we’re doing to a level that retail investors wouldn’t be able to do, and that gives us a form of validation”

 

Charles Egly, Co-founder & CEO, Prêt d’Union: “Institutional investors are not necessarily less sticky than retail lenders. They can be loyal if they are confident in our operational security. Family offices can be quite loyal”

About banks:

Matt Hammerstein, Managing Director, Barclays: “As a bank, what P2P lending is telling us is that we need to figure out how to go faster, to offer better service, and to be more cost effective by using technology better”

Lendit Europe 2015 Audience

Anil Stocker, Cofounder & CEO, MarketInvoice: “I used to think that banks would survive, but I have come to doubt it. There might be no banks in 10 years”


 

Therese TorrisTherese Torris is an entrepreneur and consultant in eFinance and eCommerce based in Paris. She has covered crowdfunding and P2P lending since the early days when Zopa was created in the United Kingdom. She was a director of research and consulting at Gartner Group Europe, Senior VP at Forrester Research and Content VP at Twenga. She publishes a French personal finance blog, Le Blog Finance Pratique and curates crowdfunding news on Scoop.It.

Sharestates Receives $30 Million Capital Boost from Ranger

Sharestates Booth

Sharestates, a real estate crowdfunding platform, has received a $30 million commitment for fraction and whole loan deals from Ranger Direct Lending Fund, a Ranger Capital affiliate.  Ranger Direct Lending Fund trades on the LSE and recently completed a $200 million public offering specifically for investing in direct lending platforms.  The two partners have agreed to focus debt offerings in the state of New York for investments in residential, commercial and mixed use properties. Ranger affiliated investment advisers manage over $3 billion in assets.Allen Shayanfekr

“On behalf of all of the team members at Sharestates, I want to express our excitement and appreciation over Ranger’s investment. The opportunity allows Sharestates to further enhance and diversify its product offerings while continuing to expand its relationships within the real estate community. It is truly a transformational deal for Sharestates, and a relationship we trust will only grow over time,” Allen Shayanfekr, CEO at Sharestates.

Ranger Partner Bill Kassul lauded the young real estate funding platform;

“In our view, Sharestates is one of the most promising real estate platforms in the direct lending industry. Their on-boarding process was completely transparent and their management team was very easy to work with. We are excited to have them as a partner moving forward,” said Kassul.

Sharestates is an online investment platform that allows investors to participate in  pre-vetted real estate projects. Sharestates sources and qualifies potential opportunities and offers securities to accredited investors through site. Based in Great Neck, New York, Sharestates was founded by Allen Shayanfekr, Radni Davoodi, Raymond Y. Davoodi along with team members, Alex Egan, Wayne Geffen, Michael Ramin and Kevin Shane.

Ranger Capital Sees Traditional Banks Benefitting from Peer to Peer Lending

Ranger Specialty IncomeRanger Capital, a company that offers traditional and alternative investment opportunities , sees the rise of peer to peer (P2P) lending as an opportunity for traditional banks, not a form of distintermediation.  Ranger Capital, along with banking executives Scott Reed and Brian Jones believe that banks may expand their loan portfolios and existing lines of business through strategic partnerships with P2P lending platforms.  Both sides of the partnership can combine to provide complimentary expertise, access and services.

Recently banks such as Union Bank, Westpac and Santander have announced partnerships with different P2P lending marketplaces. These partnerships include banks investing in marketplace loan inventory, banks taking an equity position directly in the online lending companies, and banks leveraging marketplace technology and expertise to increase their product offerings and customer experience.

“There is an opportunity for a win-win partnership between banks and online lending marketplaces,” states Bill Kassul, a partner in the Ranger Specialty Income’s direct lending initiatives. “Many banks simply need an organization to explain the opportunities and help them engage the direct lending marketplace. This partnership is being set-up to do just that.”

Ranger Capital Group, Jones and Reed want to act as liaisons between banks and the various P2P lenders.  Jones and Reed are currently with BankCap Partners, a private equity firm focusing on the financial industry.  Through the Ranger Specialty Income direct lending fund, the firm has already established relationships with many leading online marketplaces. The objective is to unite these relationships and Ranger’s existing loan investment technology to help banks purchase loans and monitor investments generated by the lending platforms.

“We believe the banking community can take advantage of many products and services provided by the online lending marketplaces,” says Scott Reed. “We see a keen interest from many banks who want to increase their loan portfolio by purchasing loans using these lending platforms, but need assistance in the set-up, monitoring and reporting to ensure these investments meet regulatory requirements. We will provide this assistance to our partner banks.”

Peer to Peer BlueInitially, the partnership between Ranger and Jones and Reed will focus on helping participating banks work with consumer lending platforms. Over time they will also assist banks in purchasing loans across multiple loan categories such as real estate and small business lending from online platforms.  Ranger announced earlier this year a partnership with P2P platform Funding Circle.

In the United States, banks largely still play a vital role in the P2P industryas they act as originators of loans and thus the P2P platforms do not need to be regulated as a bank.