Social lending firm, Rainfin, of which Barclays Africa (Absa) has a 49% stake, says it is listing 18 new loans per day.
Social lending, also known as peer-to-peer (P2P) lending, or person-to-person lending, is a type of financial transaction which occurs directly between individuals or “peers” without the intermediation of a traditional financial institution.
Rainfin said its total loan value amounts to R400,000 per day.
South Africa currently has three social lending operators, namely Rainfin, Lendico, and Wonga.com SA.
Rainfin first launched into the local market in July 2012 and with the value of loans funded at R542,600, within the first month.
After passing a strict credit vetting process, borrowers can apply for loans of between R1,000 and R75,000 with a maximum repayment period of one year.
Individual lenders can invest between R100 and R500,000 across a portfolio of RainFin loans. Borrowers can specify the loan amount, the maximum interest they are willing to pay and the loan duration up to a year.
In May 2013, however, Rainfin said that less than 8% of loan applications received for the public marketplace passed it’s moderation process. And, of the 55 loans which passed moderation to enter the public marketplace, 80% receive some portion if not all of the funding they requested from unknown lenders.
It said that the total value of loans funded amounted to R3.67 million, with only 22 lenders in the public marketplace.
However, In April, Absa bought a 49% stake in the company in order to stay on top of the peer-to-peer lending market.
In July, the National Credit Regulator (NCR) ordered the local unit of Wonga to improve its compliance, after finding the company did not verify the income of its customers.
Wonga told BusinessTech that it reviewed the letter with external advisors, “who confirmed our view that we are fully compliant with the relevant rules”.
“We have responded accordingly and have had informal meetings with the Regulator. We continue to work with the NCR to resolve any concerns,” Wonga said.