Posted by Christopher Stevenson
Last week brought the Virgin USA purchase of CircleLending, Inc. This week brings Facebook's partnership with Lending Club, a Zopa-like peer-to-peer (P2P) lending service. In the Facebook/Lending Club press release, Renauld Laplanche, founder and CEO of Lending Club says, "Person-to-person lending will gain broad adoption faster in an environment where people feel connected to each other. Facebook is the perfect platform, with 24 million active users who communicate and share information through the social graph, or the network of connections and relationships between people."
And he's not just whistling dixie; Facebook is the sixth most visited Web site in the U.S. and its primary users are young and social-media savvy. That makes it easy for Lending Club to A.) raise awareness of P2P lending in their target market and B.) leverage a ready-made network to build P2P lending. This is huge.
Is it a threat to credit unions? It depends on how responsive CUs are to the growing demand for facilitated P2P lending. I think innovative credit unions that face the challenge head on and develop new services (or partner with organizations like Zopa that provide similar services) will remain competitive. But if we ignore P2P, you can bet that the challenges will only grow greater.
