Social lending firm, Rainfin, of which Barclays Africa (Absa) has a 49% stake, says it is listing 18 new loans per day.<\/p>\n
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 \u201cpeers\u201d without the intermediation of a traditional financial institution.<\/p>\n
Rainfin said its total loan value amounts to R400,000 per day.<\/p>\n
South Africa currently has three social lending operators, namely Rainfin, Lendico, and Wonga.com SA.<\/p>\n
Rainfin first launched into the local market in July 2012 and with the value of loans funded at R542,600, within the first month.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
It said that the total value of loans funded amounted to R3.67 million, with only 22 lenders in the public marketplace.<\/p>\n
However, In April, Absa bought a 49% stake in the company in order to stay on top of the peer-to-peer lending market.<\/p>\n
In July, the National Credit Regulator (NCR) ordered the local unit of\u00a0 Wonga to improve its compliance, after finding the company did not verify the income of its customers.<\/p>\n
Wonga told BusinessTech that it reviewed the letter with external advisors, “who confirmed our view that we are fully compliant with the relevant rules”.<\/p>\n
“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.<\/p>\n
Wonga.com tackled by SA credit regulator<\/strong><\/a><\/p>\n New social lender hits South Africa<\/strong><\/a><\/p>\n MTN pushes e-commerce play in Africa<\/a><\/strong><\/p>\n