Posted by Christopher Stevenson
Peer-to-peer lending (P2P) just got a shot in the arm from Virgin USA (you know, Sir Richard Branson's Virgin), which announced May 15 that it has acquired a majority stake in CircleLending, Inc., an early leader in P2P lending. Until now, CircleLending has concentrated its attention on managing loans between family and friends, formalizing what 20 years ago would have been an IOU sketched out on a cocktail napkin. But Virgin's investment in CircleLending will create a new Virgin-branded financial service offering that promises to bring some new twists and turns. It takes a serious infusion of capital, cheeky forward-thinking entrepreneurialism (think Virgin Money, Virgin Atlantic Airways, and Virgin Galactic), and a global brand, and pairs them up with a disruptive innovator in financial services that appeals to Gen Y's reliance on peers and desire for customization.
P2P lending has been in the peripheral vision of credit unions for some time, but it looks like it has finally moved front and center. In an American Banker Online article, Anthony S. Marino, Virgin USA's SVP of corporate development, says they are "...building a major, Virgin-branded financial services company in the U.S." Virgin/CircleLending plans a series of new products, inlcuding a direct mortgage to supplement peer-to-peer home loans, a credit card, and student loans. If there has been any doubt that P2P lenders would become major players in financial services, I think they've been resolved.
Want to learn more about P2P lenders and their potential? Check out the recent peer-to-peer lending update in CUES Tech Port, or read Filene Research Instititute's great report, Peer-to-Peer Lending: Back to the Future.
