Our weekly round-up of peer-to-peer and crowdfunding news.
Peer-to-peer lenders get ahead of regulation with voluntary code, Yahoo Finance
U.S. peer-to-peer lenders have released a list of six best practice guidelines that lenders can use to protect borrowers. The announcement comes on the heels of news that the U.S. Treasury Depart is gathering more information about peer-to-peer lending. The "Small Business Borrowers' Bill of Rights" calls for more transparency, responsible underwriting and non-discriminatory access to credit, among other safeguards.
"China seeks to tame online financial risks," Financial Times
China's move toward regulation of online lending both legitimizes a growing industry and indicates the government's support of traditional banks.
“Regulation will standardise operations and expose the industry to sunlight. Practices that were seen as existing in a grey area will be forbidden,” says Xu Hongwei, chief executive of Online Lending House, a website that tracks the P2P industry. “But regulation will also increase operating costs, causing some of the lower ranking and weaker players who can’t make the cut to go bankrupt. And it will raise barriers to entry. Average people won’t be able to get in any more.”"The Wired 100," Wired Wired is releasing its annual list of 100 most influential people in tech-related fields, and this year UK-based P2P service Funding Circle Team made the list at number 92. Wired notes, "Funding Circle now has access to over 38,000 investors, who lent £100m to small businesses in Q1 2015 alone. The company hopes to hit $1bn in loans this year." "Brazil’s BankFacil Secures $3M, Launches Low-Rate Consumer Loans," Wall Street Journal BankFacil has raised venture capital so it can make consumer loans easier and cheaper. The three-year-old online lending startup mostly competes with banks, as alternative finance is a nascent industry in Brazil. Founder and CEO Sergio Furio hopes to secure a large enough volume of loans to be able to offer markedly better interest rates than other lenders, including banks. "The UK is beating the US in the peer-to-peer alternative lending market — here's why," Business Insider The UK is generating 72 percent more P2P lending capital per capita than the U.S., according to new research from Business Insider. Several factors, including a friendly regulatory environment, very high rate of online access and early adoption contribute to this. Business Insider subscribers can read the full report.
