Peer-To-Peer Lending Expands To Canada

Voyons donc, je suis une grosse banque canadienne avec un oligopole.

Nettement plus rentable de spéculer sur le marché que de m’occuper d’une pauvre petite PME.

Mr Schäuble and Angela Merkel, the German chancellor, have been campaigning for a financial transaction tax for more than a year, convinced that it would discourage the most extreme forms of speculative trading in the financial markets.

“I believe that it is in the interest of the financial sector itself that it should concentrate more on its proper role of financing the real economy, and ensuring that capital is allocated in the most intelligent way, instead of banks conducting the bulk of their trading on their own account,” said Mr Schäuble. “That is in the long-term interest of the financial sector.” (1)

Donc, à des défaut d’avoir des banques canadiennes pour supporter l’économie réelle du petit peuple, nous avons ‘peer-to-peer lending’ provenant des États-Unis.

Extrait de: OnDeck Peer-To-Peer Lending Expands To Canada, Alexandra Posadzki, The Canadian Press, 04/28/2015

TORONTO - OnDeck Capital, a U.S.-based online marketplace where small businesses can secure loans, is expanding its offerings in Canada, joining a growing number of technology-oriented lenders that promise to transform the financial services landscape.

Experts say Canada has been slow to embrace peer-to-peer lending, a burgeoning industry that provides consumers and small business owners an alternative to the banks by pairing them with institutional investors and wealthy individuals willing to lend them cash.

The concept is gaining popularity south of the border, as well as in parts of Europe and in China.

"Innovations often take longer to arrive here," says Andrew Graham, the chief executive of Toronto-based Borrowell, an online platform launched a month ago that allows consumers to borrow money at rates ranging from 5.9 to 18 per cent.

In the U.S., two large peer-to-peer lenders made initial public offerings last December:

1.      LendingClub, which loans money to consumers, and

2.      OnDeck, which serves small businesses.

Peer to peer landingNow, after an initial trial period where it offered small loans — $50,000 or less — to Canadian firms, OnDeck has set its sights on expanding north of the border, joining a handful of homegrown startups including Fundthrough, which lends to small businesses, and Grouplend and Borrowell, serving consumers.

OnDeck, which has delivered over $2 billion in loans since 2007, will now be offering loans of up to $150,000 to Canadian companies.

"We're really excited about the Canadian marketplace," said Rob Young, the company's senior vice-president of international operations. "It's our first international foray."

For consumers, peer-to-peer loans are cheaper than typical credit card rates and less cumbersome than borrowing from a bank.

"Our algorithms are available 24-7," says Kevin Sandhu, CEO of Vancouver-based Grouplend. "They don't take vacation, they don't take sick days. You can come in the middle of the night, Saturday afternoon, they're there."

For small businesses, borrowing from marketplace lenders may cost more than going through a bank. However, many small business owners don't have a choice.

Steven Uster, the Toronto-based founder of FundThrough, says small businesses are underserved by Canadian banks.

"Loans that are under $250,000 just aren't profitable for the banks," said Uster. "It takes a lot more work and a lot more time, and they'd rather do the larger-sized loans."

Surtout pour les nôtres, ils ont réussi à faire plus de profits dans une seule année que tous les déficits des provinces incluant le fédéral, pas un seul politicien fédéral ayant assez de couilles pour dire, cela suffit .

Facile d’acheter des politiciens, ne trouver pas ?

Because they offer their services exclusively online and don't have to maintain large, costly branch networks, marketplace lenders like FundThrough have lower operating costs and can turn a profit on smaller loan amounts, said Uster.

While lending money to strangers could seem like a risky investment proposition, peer-to-peer lenders say they analyze mountains of data to determine a borrower's credit worthiness.

"There is an immense amount of technology and data available that traditional lenders like banks and credit card companies really don't take advantage of," said Sandhu.

"At the end of the day, they really rely on things like a three-digit credit score and maybe some simple metrics around employment. We look at hundreds, and in some cases thousands, of data points around all of our users."

A number of banks have expressed concerns about tech companies challenging their business models and eating into their profits. In a recent letter to shareholders, JPMorgan Chase CEO Jamie Dimon cautioned that "Silicon Valley is coming."

Several Canadian bank CEOs have made similar comments during their annual shareholder meetings over the past few months. TD Bank (TSX:TD) chief executive Bharat Masrani said technology companies, including alternative lenders, are creating heightened competition in the financial services space and enjoy advantages because they are smaller and more nimble.

RBC (TSX:RY) CEO Dave McKay said the bank will need to work with financial technology startups in order to thrive in what is becoming an increasingly digital world.

Graham says that although it's a "scary time" for banks, particularly those who fail to adapt quickly enough to technological innovation, there is also ample opportunity for traditional lenders and financial technology startups to collaborate.

"We think there's an opportunity to partner with banks and provide the kinds of products we're providing to their customers," said Graham.