This week the industry has returned to its normal rhythm, as expected.
LendingTree’s published a customer rating of the top lenders which is dominated by p2p and marketplace lenders. Top customer experience is the #1 metric that will make or break a company. It is more important than profitability or revenue growth because it drives profitability when customers are willing to pay a premium for a better experience. And it drives revenue growth, as well, through referrals and return-business while keeping costs of customer acquisition low.
Also as expected, Prosper has hired bankers to raise more capital and raised interest rates. This enabled Blue Elephant to resume buying whole loans from Prosper, a great stamp of approval from one of the most credible funds in the industry.
Which brings us to the Deloitte report and the Money Banking article. Both are thoughtful industry analysis which lead to arguable conclusions. They have to be taken seriously and disproven in an organized way using real data.
What drove me to the industry, as probably many of you, has been the capacity to get a 7% return on my cash by lending it out. I am not aware of any other investment with similar risk to reward ratio and timescale. I believe the main limitation is liquidity,an issue which is solved by investing into funds. Therefore, even Deloitte acknowledges that while it is still arguable if originators can displace banks, funds investing in alt-lending offers an uncontested value no bank can match.
The experiences Prosper, OnDeck and Lending Club recently had with their institutional capital sources will open even more opportunities for alt-lending funds. Funds will provide steady capital, will be sophisticated and focused only on marketplace lending.
I look forward to funds driving the marketplace lending industry to new highs.