There is so much pent up demand to invest cash, even when the opportunities are basically short-term junk bonds. Each time Moolahsense launches a peer-to-peer loan campaign at 2.30 pm on a "First Come, First Served" basis, the loans are fully subscribed within a minute.
My goodness, it has become a case of fastest finger wins! A short pop by the toilet and I missed that window. What the shit, literally. Want to lend money also difficult. Why do they launch these campaigns at 2.30 pm anyway?
What surprises me is that most recent campaigns have been in this format while offering a high of 18% interest. "Huat ah!"
I wonder why the companies do not seek the "auction" format where the interest is likely to be lowered due to competitive offers by lenders? Is this a sign of the extent of desperation for quick cash to tide over their business needs? These companies are probably in serious cashflow deficit situations. Cash is king.
Of 21 loans I have participated in thus far, two have experienced late payments. Potentially, they could default. The business climate is difficult.
Most lenders put up between $1,000 to $3,000 per loan. The most extreme I have come across was $10,000. So I guess most are taking the approach of spreading across many loans of small amounts. They are really junk bonds, so some defaults are to be expected.
As a lender, notwithstanding the defaults, it has remained profitable so far. Let's see how this keeps up.
Happy Rooster New Year! *squawk*