As Lending Hub is preparing to launch soon (you can take a peek at lendinghub.com.au) , my first postwill be about the social lending phenomenon and whether it is likely to take off in Australia. The big four banks (CBA, NAB, Westpac and ANZ) hold large market shares in the prime borrower market and are typically risk and change averse. Most of the banks’ products are focused on easy to service and lowest risk customers (at least in terms of assessing them!). The banks are ignoring a wide range of potential customers that Social Lending services such as Lending Hub, Prosper and Zopa (also called P2P or peer to peer lending) cater for.The Social Lending sites are able to connect a wide range of individuals with surplus funds (lenders) with people who need funds (borrowers). In addition with the growth of faster Internet connections, more and more people across metropolitan and rural Australia will be able to tap into P2P Lending and Borrowing sites.

Initially consumers will need to be educated as to the merits and benefits of obtaining a loan on a social lending site and in particular the risk-return profile of an investment in a portfolio of loans for lenders. Over time people are likely to get used to the idea of not using a bank for finding a loan at a suitable interest rate and we are sure to find Social Lending take off in Australia just as it has done in the US (prosper.com) and in the UK (zopa.co.uk) just as online auctions (e.g. eBay) and online share trading (e.g. E*Trade) have now become commonplace.

Related Post

• What is Social Lending: How to Borrow Online
• Australians and Social P2P Lending and Borrowing
• New Lending Hub Blog Ready!
• Peer to Peer and Social Lending Blogs
• Connecting Borrowers and Lenders Online in Australia