One afternoon in late 2013, I was sitting with a close friend at a local diner, talking about the potential that peer to peer lending has to transform the way our country interacts with its finances. Over cups of coffee and slices of marionberry pie, my friend asked me which angle of that picture excites me the most. Without hesitation, I mentioned the way this asset class gives people agency over their personal investing, the refreshing degree of control it offers them over their own future. Indeed, what continues to captivate me today is the liberty in peer to peer lending. It offers a consistent and lucrative return to anyone who possesses the ability to understand basic financial concepts (diversification, risk, and so on), irrespective of their economic or social status.
However, this is not the current trend of things. As this asset class becomes more and more popular by the month, the bulk of its demand is coming from deep-pocketed financial institutions who possess the wisdom to know a good thing when they see it. This is both expected and welcomed, for their capital is largely responsible for the new stability of this asset class. However, the picture that captivates both Lending Club and Prosper is how this industry is transforming the country’s financial fabric, how it connects people who need money with people who have extra to lend.
This remains the captivating vision for myself as well. It is the reason why LendingMemo has only half-covered the numeric monthly issuance of Lending Club and Prosper. While billions of dollars in new online consumer loans is a wonderful indicator of the strength of this asset class, and as much as it has helped thousands of Americans consolidate their debts at a more reasonable interest rate, this same popularity has not been equally mirrored on the lender side. The real metric at Lending Club and Prosper that I celebrate is not so much the staggering originations, but more the numeric growth of its investor population.
As I sat with my friend in that diner, I realized the part that LendingMemo can offer toward the wider story of peer to peer lending, particularly that of education and advocacy. While continuing to celebrate the historic rise of this asset class as a whole, this site seeks to remain acutely captivated by the way peer to peer lending democratizes personal investing, and seeks to engender the country with this same captivation. As average Americans read in the press about this new exciting way for them to invest, the need remains for an educational arena to help them get started. This is the role that my company is offering to play.
This site is unveiled today as a space to champion the retail investor.
My friend and I finished our coffee and left. That same evening, the first sketches of a framework were laid for what a peer to peer lending educational site would look like. Months of conversation and hard work ensued. Today, I am very proud to unveil LendingMemo as a hub for average Americans to discover and begin lending money online. With an aesthetic both intelligent and popular, with an always-free membership that seeks to fill itself with approachable and smart content, this site is unveiled today as a space to champion the retail investor.I want to take a moment to thank all the people who made this site happen, particularly Michael at The Bright Agency. He was the lead designer, and is largely responsible for the palpable glamor of this site. Secondly, I am indebted to the talented developer team at 9Seeds, with special mention of Jon Brown for his hard work and savvy code. A few additional people have made this launch happen, including the keen audits of Niko, the continuous sounding-board sessions over marionberry pie with Pat, and finally, the support of my family and friends. I am very grateful for all of you.
As the Lending IPO draws closer on the horizon, offering to unlock investors in all 50 states, and as Prosper emerges as an equal, providing fresh competition and energy within this industry, I am so eager to see the national picture that is set to unveil. Give it eighteen months – this country will never be the same.
[image credit: Chelsea Nesvig “marionberry pie” CC-BY 2.0]