Tech Tuesday: Back from Christmas break…
…to introduce an online company that breaks traditional banking practices
Tech Tuesday is an ongoing series profiling the Forum’s Technology Pioneers. The Tech Pioneers are companies that have been recognized by the Forum for groundbreaking and innovative approaches in tackling some of the world’s most wicked problems. Each week we will showcase one of the 2012 Tech Pioneers. You can learn more about the Technology Pioneer Programme on the Forum’s website.
Lending Club bypasses traditional banking to pioneer peer-to-peer financing
Lending Club streamlines its financial services over the Internet to create a direct link between creditworthy borrowers and potential investors. By stripping away the red tape and bureaucratic hurdles that normally accompany traditional bank loans, it is able to reduce processing costs and offer loans at rates considerably cheaper than competing banks. Rates are based on creditworthiness; applicants can sign up in minutes to get an immediate quote on how much interest they are likely to be charged. Investors establish an online portfolio and decide where they want to invest. Lending Club makes a number of tools available to lenders, and the risk of a loan not being paid is reduced because the lender only buys a small portion of each loan, and the lender’s portfolio is likely to cover a large number of different loans. If a borrower defaults, the loss is minimalized by spreading the cost over a large number of investors, and Lending Club also has arrangements with debt collection agencies to make certain that the loan eventually is repaid. Lending Club’s greatest protection, however, is its stringent selection process for borrowers. Only around 10% of loan applicants meet
Lending Club’s exacting standards. By pioneering a significantly more efficient way of connecting borrowers and lenders, Lending Club has both expanded the availability of capital to keep business moving and set a new standard of efficiency for financial institutions.
Lending Club
Renaud Laplanche, Chief Executive Officer
Location: CA, USA
Number of Employees: 60
Year Founded: 2007
Lending Club
370 Convention Way
Redwood City, CA 95124
USA
Telephone: +1 650 482 5231
pr@lendingclub.com
www.lendingclub.com
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