CUNA News Now covers p2p lending today
Posted by Trey Reeme on May 25th, 2006
I was thrilled to see CUNA News Now covering peer-to-peer (p2p) lending today. They offered an overview of Prosper, and this is the first time many credit union leaders will have heard of the concept of social lending.
Loved the language in the piece:
Some experts say such lending sites could topple the credit industry, bringing transparency and fairness to the market. The premise is that borrowers shut out of the traditional loan market can find money at reasonable rates. Lenders can get a better rate of return than they would on some other investments.
Transparency is what consumers are now expecting in the relationships with their financial service providers.
Read what we’ve said about the peer-to-peer lending concept:
I’ve just recently started hearing about p2p lending, and I believe that it is something to be watched. I have heard that these types of sites have been very successful in Euorpe, and it will be interesting to see just how quickly the concept catches on in the states. Does anyone know how the European credit union movement has been impacted, or is too early to say? Will it topple the credit union movement? Well, I would hope not, but it is another example why complacency just can’t be in the credit union vocabulary.
I guess the best indicator of the impact is the number of Zopa users in the UK after year one:
72,000 – according to a very recent (May 23) Forrester study called Zopa Shows That P2P Lending Can Work. (I wish that report wasn’t $249.00 and only 6 pages long. Oh well.)
I don’t think it’s going to topple credit unions or the traditional banking industry, but I don’t think it should be ignored either.
I see it as being an opportunity – peer to peer lending is the credit union model, after all. They’ve made it very relevant and had success in a part of the market that credit unions can’t hardly reach: young adults.
Newbie here, but not newbie to this article!