The Good Credit loan is, therefore, a relatively restrictive solution, both by its anxiety-provoking nature for the lender and by the low probability of being able to use this remedy on the borrower’s side.
It is therefore in this relatively little innovative universe (on the one hand that the banks are content to share the “cake” improperly, on the other hand, an inoperable alternative solution) that the first platforms of loans to individuals were born.
For the first time, individuals (but also legal persons other than credit institutions) could, therefore, carry out direct credit operations, in order to finance the needs of other individuals.
The first platforms
The very first personal loan platform (“p2p lending” in English) was born in England in 2005: Zopa. It was quickly followed by other initiatives, notably in the United States: Prosper (in 2006) or Lending Club (in 2007, founded by a Frenchman, Renaud Laplanche).
The principle was simple: thanks to the web, demand (borrowers) could finally meet supply (lenders) more easily. Some control tools (and in particular the famous positive file, which allows a clearer reading of debts contracted by an individual), others to allow exchange, and individual lenders could choose the borrowers on which they were going invest.
Very quickly, these platforms met with some success: Lending Club, for example, saw its production of financed credits drop from $ 91,850 in June 2007 to $ 7,693,800 in January 2008! This success was emulated: Germany, China, India, Netherlands, Italy, Sweden, Japan … all these countries have seen the emergence of credit platforms between individuals.
A flawed system
Unfortunately, the 2008 financial crisis was going to highlight the defect of these platforms.
The banking model, if it is outmoded, nevertheless relies on solid risk analysis bases. And the internet lender cannot improvise as a banking analyst in the evening before sitting down to eat …
So, unfortunately, in the absence of a loan pooling system (which has the virtue of diluting the possible default of a borrower on all lenders), some platforms had to close (this was the case of Lending Club for example) to improve their system.
Today, most offer options to select a significant number of projects “at random” and thus invest in more borrowers. As the old saying goes, “never put all your eggs in one basket”!
What about France?
As we have seen, foreign platforms have experienced major shortcomings in securing the loan.
Thus, credit platforms between individuals as they have been launched abroad were prohibited in France. The Good Finance could not grant banking authorization to a system that left such a large share of risk.