March P2P Lending News
March saw some interesting reading across both local and international media sources - here's a selection of some of our favourites.
In a topical Interest.co.nz piece, Deloitte’s Troy Andrews talks about the FMA’s role as a world leader in legislating for the nascent P2P lending industry in New Zealand. He explains why the accompanying tax regime may still have a bit of catching up to do.
FMA CEO, Rob Everett talks to Interest.co.nz about the difficulties in regulating an industry with so many different business models. Ultimately, he says it is a good thing, as the original P2P legislation was meant to encourage an increased level of competition.
In internal news, we were really excited to announce a new partnership with an Auckland-based advertising and media agency this month. General Manager, Monica Mathis says, "we needed an agency that could assist us to take our brand to the next level.” Find out which agency won the account.
AltFi Australasia Summit
Our General Manager of Australia, Ben Taylor, participated on one of the panels at the inaugural AltFi Australasia Summit last month. Here’s what he had to say about it: “The AltFi conference in Sydney was excellent, and had a really good turn out - about 300 people - all interested in the Alternative Finance industry! There is strong support from Government, Regulators and Industry to support and grow the Fintech arena. Next year, I'm expecting the conference to double or triple in size in attendance and agenda.”
For any of you who missed it this year, we’d encourage you to attend next year. It’s a fantastic way place to network and learn about all the platforms.
Lendit USA 2016
Harmoney’s Head of Institutional Funding, Duncan Gross, will be attending Lendit Conference again this year. For those who don’t know, Lendit is the world’s leading P2P conference where platforms and investors come to learn, network and do business. This year is certainly no exception with a powerhouse lineup of keynote speakers scheduled for the event. It takes place on April 11-12 at the San Francisco Marriott Marquis. You can find our more about the event, and register to attend, over on their website.
US Certified Financial Planner Q&A
Prosper, the US’s second largest P2P lender, runs a regular question and answer session with their community members. This month, they interviewed the President of Eleven Two Management Funds, a certified financial planner, member of the Alliance of Comprehensive Planners and an investor on Prosper’s marketplace lending platform. The brief interview covers the importance of alternative investments and diversification in a modern day portfolio.
P2P In A Rising Interest Rate Environment
Yahoo Finance published an interesting article on how rising interest rates will affect P2P lending. The piece featured the two largest P2P bloggers in the world who have been analysing the P2P space for over a decade.
Peter Renton, Founder of LendIt and Lend Academy, says that while rising interest rates could impact borrowing costs and investor returns, it's unlikely to negatively impact the industry itself. “I see it as a strong business even in a rising rate environment. There will always be people looking to invest at a premium and borrowers looking to refinance. P2P offers superior benefits for both, with yields for investors and lower rates than credit cards.”
Simon Cunningham, founder of Lending Memo, says that unlike bank loans where rates are directly correlated to the federal funds rate, P2P lending is supported by individual borrowers and lenders. “Rates are ultimately determined by what borrowers are willing to pay and what investors are willing to earn. It's entirely market-driven. The only thing that causes rates to move is investor and borrower demand in the platform."
Diversification For Math Geeks
Lending Robot published an article on their blog about the importance of diversification for the quantitatively minded investors. In P2P investing, we’re always told that we need to manage risk by spreading our capital over hundreds if not thousands of different loans. The reason is so the performance of any one investment does not have an unreasonably significant impact on the overall performance of the account. A strategy of diversification helps reduce volatility while still allowing investors to achieve their target return.
That's our favourite picks for the month of March - stay tuned to see what interesting updates there are in April.