BitLendingClub Leads P2P Bitcoin Lending Market in Loan Volume
BitLendingClub, a peer-to-peer (P2P) bitcoin lending marketplace, has released its latest figures. The startup has nearly reached US$430,000 in monthly loan volume, beating out competitor BTCJam.
"We’ve been working hard for the last few months [to] become the leading platform, so this was a huge milestone for our team and our customers,"
According to him, BitLendingClub's success is due to the startup's primarily focus on lowering loss rates, a strategy that has led Lending Club to become successful.
"Neither Lending Club, nor any of its competitors became successful because they were able to collect on defaults," Gantchev argued. "On the contrary, they became successful, because they were able to prevent defaults. Over 90% of the applicants that request a loan on Lending Club are actually rejected."
This prime concern pushed the BitLendingClub team to make improvements in the area, which has led to the lowering of its loss rate by more than 50%. Today, the default rate amounts at around 8%, according to the company's statistics, a level that took Lending Club nearly 3 years to reach.
In its two years of existence, the startup has processed over 6.500 bitcoin loans. It took Lending Club almost 3 years to reach that same level.
According to Gantchev, his company's success is the proof that P2P bitcoin lending "can be as big, if not even bigger, than the fiat-based P2P lending," he told CoinJournal.
"P2P lending is one of the biggest fintech innovations of the last 7-8 years. Banks have, rightly, seen a tremendous amount of distrust and lack of loyalty from their customers. In addition, banks have failed to service huge sections of the population, which has allowed many fintech companies to fill the gap.
"Bitcoin steps in where fiat can't and allows financial technology innovation to reach a lot more people across the globe.
"Users [...] come to our platform in order to get a loan, and bitcoin makes it extremely easy to put money in their hands "
As a matter of fact, BitLendingClub currently serves users from over 70 different countries, while leading market players such as LendingClub, Prosper, UpStart, OnDeck, and Kabbage, are all based in the US and are largely restricted to this market.
"This is what makes our platform so successful: we're democratizing financial innovation in a way that is only possible, thanks to bitcoin," Gantchev said.
On an investor perspective, bitcoin-based loans are a great opportunity for those who are looking to diversify their portfolio and "tap into a market with higher returns."
"This tier of investment products has typically been restricted to institutional and retail lenders where P2P lending marketplaces are available: US, UK, Australia, etc," Gantchev said. "In many cases, there is quite a bit of discrepancy between what is the fair market interest rate for loans in, say, Argentina versus the UK."
This disparity provides an opportunity for investors with a higher appetite for risk, while giving access to others from countries where these loan products aren't available, to participate by joining the platform.
Coinjournal reached out to BTCJam for comments but did not receive a response at the time of publication.
About Diana Ngo
Diana Ngo is a freelance fintech, blockchain news writer based in Cape Town, South Africa. She has worked for French- and English-language online publications, covering fintech, blockchain technology and digital currencies. Diana joined CoinJournal in June 2015.