Social Lending: Beer-to-Beer Loans

[GuyJean]

[Mike Oxlong]

You don't suppose her name had anything to do with it...?

[GuyJean]

Looks like Maneo currently is the only P2P Lending structure set-up in Japan..

http://prosperlending.blogspot.com/2008/10/maneo-becomes-first-p2p-lending.html

Maneo is actually a play on the English words money and new. Maneo's CEO Tadatoshi Senoo said the platform has been in development since August 2006. Like the United States, Japan has extensive regulatory hurdles which had to be overcome...

How to use maneo's social lending service

After initially registering as a member with maneo, borrowers and lenders can utilize maneo's social networking service. Registered members can easily and effectively communicate with other members utilizing "mane blog," "maneo message," and "mane tomo."

Creating an auction

People who want to borrow on maneo create loan listings explaining how much they desire, why they want to borrow and the maximum interest rate they are willing to pay lenders. Potential lenders select the loan listings they are interested in and bid on these loans. maneo connects borrowers with lenders through an auction process in which the lender willing to provide the lowest interest rate "wins" the borrower's loan...

Curious if anyone has used it, as a lender..



GJ

[sublight]

I wanted to try Prosper as a lender, but they required a residence in the US. If this sort of thing is available in Japan now, I may just give it a try.

[Mulboyne]

The regulators in Japan don't know what to make of peer-to-peer. They are concerned that if lenders and borrowers are directly aware of each other's identity then there may be scope for coercion which is what they have been trying to eradicate from the consumer lending industry. That's one of the key points holding up Zopa right now because they have a direct person-to-person model as well as a pooled model. If you look at the Zopa UK listings, some people use their real names and post photographs. It's not that the FSA is against the idea entirely, it is more that they want reassurances that such companies won't become a conduit for organized crime so they are particularly interested in the approval system for both borrowers and lenders. For some social lenders, however, the fact that the lenders and borrowers know each other is important in establishing a sense of community and responsibility.

It's not just borrowers who might need protection from predatory lenders. Depending on how robust the system is, there is concern that gang members might pose as borrowers. Also, the FSA identified "multiple loans" as a social problem affecting some genuine borrowers. That is, they had taken out additional sarakin loans to pay off a first loan which got them deeper into debt. All sarakin companies share a credit database so they can see whether a borrower has loans outstanding with other firms and the FSA mandated a restriction on lending if they already have several. The peer-to-peer lenders won't have access to that database so there will be no formal way of checking whether a borrower already has sarakin loans or, conversely, for a sarakin company to check whether one of their loan applicants already has a a peer-to-peer loan.

In the UK, Zopa goes to Equifax for a credit check and they could also go to Experian but there isn't really a similar organization operating in Japan which is a major reason that sarakin companies dominate unsecured consumer lending instead of the commercial banks. CCBis close and Experian announced a joint venture with them last year so there are attempts to improve this part of the business. (Experian does have a "classification system" it rolled out in Japan which divides the population into segments called Artisan Economy, Ancestral Homelands, Middle Japan, Fishing Ports, Inner City Tokyo, Nagoya Housing, Factory Towns, Coast and Mountain, Sprawling Infill, Osaka Terraces and Factory Accommodation etc. but that is just census data).

People registering with Maneo appear to be using handles rather than real names. It's fascinating to see some of stories and replies. I see Banana wants 1.3 million yen to "help stupid old me" and is willing to pay 11.5% over a 33 month term and the application is almost fully subscribed. He (it might be she with a handle like "banana") says he already has three loans outstanding from sarakin companies which he took out for wedding and moving expenses. He hasn't missed a repayment but can't make any headway on the principal so wants to consolidate the loan with Maneo which he read about in Spa. He'll use the loan to clear his sarakin liabilities and then use his income to pay down Maneo. Someone asks him whether he might be tempted to take out another sarakin loan during the 33 month period which is fairly lengthy. Banana vehemently denies the suggestion, saying that it would be the road to ruin. He says he would give up drinking, golf and mah jong rather than go back into debt.

A quick look at other reasons for borrowing include: buying cars, going to court to sue over a failed investment, starting a franchise crêpe operation, producing a CD, sending a daughter to university, home repairs, dental work, helping a son fulfil his dream to become an entertainer, paying a drunk driving fine, funding a refurbishment of a Shibuya nail salon and hiring a personal trainer.

[amdg]

People registering with Maneo appear to be using handles rather than real names. It's fascinating to see some of stories and replies. I see Banana wants 1.3 million yen to "help stupid old me" and is willing to pay 11.5% over a 33 month term and the application is almost fully subscribed. He (it might be she with a handle like "banana") says he already has three loans outstanding from sarakin companies which he took out for wedding and moving expenses. He hasn't missed a repayment but can't make any headway on the principal so wants to consolidate the loan with Maneo which he read about in Spa. He'll use the loan to clear his sarakin liabilities and then use his income to pay down Maneo. Someone asks him whether he might be tempted to take out another sarakin loan during the 33 month period which is fairly lengthy. Banana vehemently denies the suggestion, saying that it would be the road to ruin. He says he would give up drinking, golf and mah jong rather than go back into debt.

There is no smiley that adequately expresses my thoughts on this.

[GuyJean]

Yeah, that's one thing I was wondering; if the mafia would somehow get involved eventually.. But this is Japan; what aren't they involved in?

I'm not sure if I'm willing to loan money to complete strangers, but it would be interesting to review and make the decision myself.

I was actually looking for a Social Lending structure incorporated in MySpace or FaceBook (It does exist, but only for certain States and nothing international: 'Lending Club'). If I already knew the people in need, the decision would be easier. Also, I think there's going to a lot of people needing help just to get along in the near future..

Thanks, Mulboyne, for the input. Not sure if I'll experiment with Manero yet..

GJ

[GuyJean]

[GuyJean]

[GuyJean]