Lending Club now available to alumni of University of Michigan, Kansas State and Georgia Tech
Three questions: CEO Renaud Laplanche
Hi Renaud – What’s the latest news at Lending Club?
After we opened Lending Club beyond its original Facebook environment last month, we started developing partnerships that will extend Lending Club to a variety of existing communities and networks, beginning with three great universities.
Lending Club is available today to Kansas State and Georgia Tech alumni. It will be available in about a month from now to the 420,000 alumni of the University of Michigan. We chose to make this announcement during the homecoming season, which traditionally has marked the return of millions of alumni looking to reconnect and give back to their alma maters across the country.
What is the significance of this announcement?
I believe this is the first time a financial service has combined the member benefits of alumni associations with the social interaction and viral nature of a social network (sorry, I mean a social utility) like Facebook.
Whether they become Lending Club members through Facebook or via their alumni association websites, our friends the K-State Wildcats, the Georgia Tech Yellow Jackets and the Michigan Wolverines will be able to lend and borrow money within their respective trusted alumni communities.
What makes alumni relationships relevant for lending and borrowing?
Person-to-person lending grows faster when a level of trust exists between borrowers and lenders. Adding in whole communities of alumni with that trust built in dramatically increases our ability to extend great opportunities to everyone on the platform.
Potential lenders feel closer to their fellow alumni than they do to the general public: they feel both a desire to help and a stronger sense of trust due to their shared connection. If you can make a 12% return (which is the current average of all lenders’ portfolios on Lending Club), and at the same time help fellow alumni, it becomes a no-brainer for lenders.
Borrowers also feel more compelled to make payments on time because they know that their lenders are fellow alumni who are counting on these payments. This keeps defaults minimal and, in turn, reinforces trust on the lenders’ side. You can expect more announcements on this blog shortly as new online communities join the Lending Club ecosystem every week.
Wednesday, October 31st, 2007 at 5:23 am