I spent a week in France and Germany recently to meet with the marketplace lending leaders there. I found a vibrant market in both countries albeit less developed than in the UK or the US.
The French marketplace lending industry is still in its infancy. Due to a very strict regulatory structure there is only one online consumer lender operating in France, Younited Credit (formerly Pret d’Union) and small business lending platforms have only begun operating in the last 18 months. In late 2014 the French government made it legal to make loans to small businesses without a banking license. This has led to a large number of new platforms, they say the count is around 50, to launch since then.
The French government is also actively involved in the industry through an entity called BPI – setup with similar goals to the British Business Bank. It wants to stimulate lending to small businesses. BPI will take small equity positions in fintech companies, it will invest on platforms and it will make interest free loans to qualifying companies.
In France, as in most of Europe, investors have much lower expectations when it comes to returns. The French are conservative investors and with term deposits earning 0.5% to 1% a 3% or 4% return is considered attractive to investors.
Younited Credit (formerly Pret d’Union)
Younited is the only p2p lender in France focused on consumer loans. This is because you need a banking license to offer loans and this is a very laborious and expensive process. They received their credit institution license in 2011 and issued their first loans in December of that year.