Every Saturday I bring you the latest news from the world of peer to peer lending. These are the best of the news articles and blog posts from around the web that I shared on Twitter this past week.
It was a very light news week to say the least. The biggest news item of the week was one that was not very flattering to p2p lending at all. I am ok with writers not liking p2p lending as an investment but I don’t appreciate it when a widely read website makes false and misleading statements which is the case on this Business Insider article below. I had to make a comment which they thankfully published. In more positive news it is good to see SocietyOne making some headway in the p2p lending space down under. Enjoy your long weekend.
Business Insider – Think Twice Before You Jump On The Peer-To-Peer Investing Bandwagon
Brave New Life – Lending Club Update: August 2012
Australian Anthill – How P2P Lending is Making its way Down Under
Money Talks News – 8 Ways to Earn More on Your Savings
National Family Mortgage – National Family Mortgage Hits $50 Million in Peer-to-Peer Lending (press release)
Enjoyed your comment on the Business Insider article. I thought the exact same thing. Absolute statements made without pertinent contextual data, such as actual historical performance. To the many readers who often implicitly trust the veracity of an article, the author did a great disservice. (Hopefully they made it to your comment :p)
Good to hear from you on here Jonathan. Yes, many so called finance experts dismiss peer to peer lending without really doing any research. I like to call them out on it because they never back up these claims with anything more than anecdotal evidence if even that.
Re: Business Insider – Think Twice Before You Jump On The Peer-To-Peer Investing Bandwagon
Here is all you have to read to understand the position of the author, “The higher the risk that the borrower will shaft you…” Obviously, the author has a very negative view or p2p lending, but really, “shaft?” I would say that there are the deadbeat borrowers and a few who make one or two payments only before defaulting, but I think that these borrowers are more the exception than the rule AND even then I wouldn’t say that all of those borrowers are really out to shaft the investor. It is risky, and you will get defaults. But I think most of the people who default on loans are simply in a bad financial position or suck at personal financial planning. And I hope that Prosper and LC are good at weeding out the borrowers who are intent on shafting lenders and going after the borrowers who slipped through and actually shafted the lenders.
Roy, I know we have had many discussion on here recently about these borrowers who bail out very early on. It does happen and I wish it happened less but it happens so rarely that well diversified investors can still receive great returns even with these early defaults. That is what this article on Business Insider missed completely.
I’m fine with the ignorance. I’m actually used to it from media sources. And really, there is a lot of information out there, and no one can possibly know everything there is to know about everything…though I really wish I could! What irks me is that the author made a conclusion out of ignorance and then used a loaded term like “shaft,” and then used it describe basically every borrower who defaults. The term “shaft” implies willful malice on the part of the borrower, and I simply do not believe that is the case for the majority of early defaulters, let alone those who default later on. So, overall I find the article a little insulting to the borrowers with a general antipathy towards p2p lending rather than the author taking a more neutral stance. I’m not saying they shouldn’t warn about early defaulters, they just need to take a more neutral stance when doing so…of course, all of this is just my humble opinion, and it is possible I’m being a little too defensive about it.