In September 2011 Cabiedes & Partners invitó a Comunitae (web de préstamos entre particulares) a presentar su proyecto en la AIEI. José and Luis Martin Cabiedes They intended to invest in this business, and as they usually do, they brought it to the AIEI so that the other members of the association could also evaluate it. I was delighted with the talk we had then with Arturo CerveraThe founder and CEO of the company; and the p2p lending sector, which in my opinion has a lot of potential to take this business away from the banks. So I decided to invest in Comunitae, together with Cabiedes and Good Invest (Norberto Varas). Esta inversión seconcretó en noviembre 2011.
With this investment, Comunitae has mainly dedicated itself to improving the product: improving its website, the process of registering loan requests, the process of registering lenders, etc. At the same time, the banking sector has been worsening, restricting credit and generating less and less confidence on the part of individuals. Banks and savings banks demand higher and higher interest rates for loans, and offer lower returns to depositors. As a result, more and more people are turning to p2p lending to finance themselves or to invest their money.
Private-to-private lending success stories: Lending Club, Prosper, Zopa, ...
In the United States, Lending Club and Prosper already more than 1,000 M$ of loans (TechCrunch)in annual growth of 100%.
In the UK, Zopa has already raised more than £200m in formalised loans.
En España también, aunque aún a escala más pequeña: Comunitaesuma ya más de 1 M€ en préstamos formalizados, en pleno crecimiento (más de 70 mil € prestados en mayo 2012, 7 veces más que en mayo 2011).
How does Comunitae work?
The company receives loan requests from individuals via the web. It analyses the credit profile of each person requesting money, asks for all the necessary documentation, and discards more than 70% of the requests. Comunitae also grades each request with an A (lowest), B or C risk level. 30% of the requests are accepted and published on the website so that users can lend to those they want.
How much does it cost those who ask for money?
The interest rate depends on the risk level of the borrower and the evolution of interest rates on the market: currently between 10% and 15% APR for loans of up to €10,000 with a maturity between 1 and 4 years. Comunitae also charges the borrower an origination fee of 2.5%.
How much do those who lend money earn?
Users who lend money are charged the agreed interest rate according to the loan, pay a management fee of 1% to Comunitae, and are currently in arrears at less than 5%. With this, in fineIn the case of the "Lender's return", lenders have a net return of 7-8% (actual data 2009-2012), much higher than the return on a deposit, and with less risk than with preference shares, convertibles, structured products, ...
What happens if someone does not return the money?
Comunitae takes care of the management of non-payments to obtain the payment of the amounts due and in case of non-payments it shares the information with the largest provider of information on non-payments in Spain (just as with a bank it is not advisable not to repay a loan because one ends up included in the files of defaulters). It negotiates payment schedules with potential defaulters, and ultimately sues and prosecutes them.
How to invest by lending money?
Es sencillo: te das de alta, haces una transferencia bancaria de tu cuenta a Comunitae y vas eligiendo las solicitudes de préstamos en las que quieres participar. Lo suyo es prestar poco dinero a mucha gente, para tener así el portfolio más diversificado y reducir el riesgo. Luego a medida que se irán pagando los interés y devolviendo el principal, Comunitae te lo abonará en tu cuenta, y cuando quieres lo re-inviertes, o dispones del dinero.
In the end, it seems that the time has come for the peer-to-peer for loans between individuals in Spain. It is undoubtedly a very attractive option to take out a loan, or to diversify your investments while obtaining a much better risk-return ratio than the financial products offered by banks. what do you think? do you dare to try it out?
More info and opinions:
- Blog Comunitae y Twitter @Comunitae
- Artículos en El Confidencial, Loogic, Invertia, iAhorro, Actibva, The Salmon Blog, ...
- Profile of Comunitae on Crunchbase and Comunitae on Linkedin