Microcapital reports (via Auctionbytes) that eBay has moved into the peer-to-peer lending space with the purchase of MicroPlace. This is significant because eBay is far from the first to enter this space - which is currently dominated by Kiva, Zopa, and Prosper.How will a big company like eBay succeed in the nascent world of P2P lending? Will this affect the way Kiva or Propser works? More on the acquisition, from Microcapital:
MicroPlace will soon launch an eBay style online marketplace where individuals will be able to make microfinance investments, most likely in the form of notes offered by microbanks. The transaction will be hosted by eBay working through an intermediary like the US Calvert Foundation in order for such investments to clear regulatory hurdles. It will be in the same vein as current sites such as prosper.com (for-profit), where individuals list and bid on loans within the US market, and Kiva.org (non-profit) where individuals can lend to specific micro-businesses in the developing world through links with microfinance institution (MFI) partners.
How “great a thing for the global community” it remains to be seen. The success of this recent venture by eBay will depend on giving its customers what they want. But in a ‘global community’ who are the customers? If the customers are those people in advanced economies, shopping online for “feel good” investment opportunities, then MicroPlace is likely to be as successful as Kiva.org and Prosper.com. However, for the microbanks and the micro-borrowers involved there is the additional risk of foreign currency exchange. If this risk is not properly managed then the burden will fall heavily upon those who we all seek to help. Can a giant like eBay responsibly off load this clear and present risk onto microbanks and micro-borrowers?
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Prosper has originated over $100mm in loans, with over 500k+ members, and parked about $20mm more in VC not long ago.
Zopa (who, at the time of this article, operated only in the UK) has launched a US version in partnership with six US credit unions. The model is not quite "P2P", as lenders are asked to purchase a guaranteed CD (~5%), the purchase proceeds of which Zopa will lend out to borrowers (presumably pocketing the spread).
LendingClub.com, a completely new player, launched via the FaceBook social networking platform, and has just recently opened to the non-facebook public. Their platform is P2P, but it differs from Prosper's more laissez faire implementation in that LendingClub underwrites the loans, bucketing them into different grades at different rates - doing away with the typical auction process.
More info on this space, including side by side comparisons of players, at:
PeerLend: P2P Lending & Peer-to-Peer Loan Reviews
Two more market entrants are apparently ramping up for launch, as well: GlobeFunder & Loanio. The former is in limited testing in a handful of states, the latter in stealth mode, but supposedly scheduled for launch sometime in January '08.
In addition to the US for-profit players, there are also a handful of non-US focused, more "social finance" oriented (in the Kiva/MicroPlace vein), projects popping up...