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It is publicised today that Funding Circle, the peer to peer lender, is coming to market at a valuation of £1.5 billion and is raising a lot of dough to expand in the USA and Germany. But seemingly not the UK. I wonder why.
However, the problem remains the same: we have not yet had a full economic cycle to test the debt collection performance of P2P lenders. So, I would be cautious.
Where I think a different kettle of fish altogether is being served up is Amigo, which has got over the problem of the inability of the debtor to pay off debt contracted at eye-watering rates of interest by getting the debtor to arrange a guarantor as to his performance. Thus, suckers will back up the borrowers hoping that Amigo will hound the debtor first. I doubt it: Amigo will just go for the guarantors by the throat.
This of course supposes that the borrower has not faked the guarantee support paperwork. In which event Amigo will threaten the borrower with imprisonment for fraud. None of this is nice.
Mathematics is a beautiful subject, but it should not be left in the hands of uncomprehending journos, one of whom has been highlighted to me by the chairman, who points out the journo’s text that the Argentinian peso has fallen 108% against the dollar. Well, it is a world record collapse.