The most recent news from the Boober brand is that Boober Netherlands was shut down earlier this year by Dutch regulators. Can you give us some information about whether Boober.nl has plans to re-open, and how Boober.it is related to Boober.nl?
Boober.it started in November 2007 as a joint-venture between Boober International and Centax (which is a financial service Italian company mostly focused in check services). Boober Italy acted as a licensee of Boober International which was owner of the brand, the platform and the market rights for all over Europe. In October 2008, Boober International decided to discontinue their activity and at Centax we decided to buy the 50% of Boober Italy, the Boober brand and the website platform plus the possibility to exploit all the European market except for Netherlands. As far as Boober.nl is concerned, we have no visibility of their plans but I believe they will no re-open in the future.
Do you have any plans to open Boober sites in other countries in the near future?
Our plan for expansion in other European countries will target 2010 after consolidation on the Italian market. Priority countries will be for us Spain, Portugal and easter countries where internet is rapidly growing as a business instrument (Romania, Hungary, Slovakia, Poland).
How is Boober Italy regulated? Do you have explicit regulatory clearance from Italian officials? If not, do you need to or plan to seek it?
Centax is a financial service provider, regulated by the Bank of Italy and we have submitted the Boober peer-to-peer landing platform which was approved within the present frame of Centax activities.
Can you give a little more information about Boober Italy is regulated? Are P2P loans considered securities in Italy as they are now in the US? What does Centax’s “Financial Service Provider” status allow Boober to do? Does it only allow Boober to issue loans to borrowers, or also to sell them to lenders?
The p2p loans in Italy are regulated by Bank of Italy as any other financial service. P2P Loans are permitted only between private individuals; thus means that loans are not permitted between individuals and companies or intra companies. Centax is a regulated company by the rules of Bank of Italy operating in the area of the payments systems and credit transfer. We have started this initiative in the p2p loans over the internet because we see great opportunity for the future, but our core business is totally different and it is focused on the area of cheque services and processing. In our business model we don’t issue loan to borrower but we manage the marketplace between lenders and borrowers, promoting the website on the net and providing a certain number of back-office services both to lenders and borrowers, the most important being the risk assestment and evaluation.
Is there a specific model that Boober had in mind when building their site? Was it based on eBay or an existing P2P lending company?
We inherited the Boober.nl original model, which is close to eBay and adapted it to the Italian regulations.
Boober.it launched more than a year and a half ago. How much in loans has been issued through Boober to date?
738.000€ and 123 borrowers have been funded by more than 300 lenders. Currently our volumes are still too low for producing meaningful statistics month by month or day by day. When Boober.it will reach its expected dimension, more statistic will be implemented in order to give to the user meaningful data to consider.
Do you publish public statistics about your lending activity?
Yes, you can find some statistics on Boober.it homepage (look at the top).
What is the aggregate default rate to date on loans issued during your first year of activity (Nov 2007 – Nov 2008)?
About 2%, concentrate in only few loans. But looking at the statistics from Sep 2008 to nowadays, the default rate is 0%.
According to your lender fees page, Boober charges (but is currently waiving) a EUR 9.95 annual subscription fee. Is there a reason you have decided to waive this fee? How long do you plan to continue waiving the subscription fee?
The decision to waive the fee is related to promotional activity and we will keep it at least for the rest of the current year. Maybe it could be extended for the 2010 too.
According to your lender fees page, Boober charges a 10% commission on all accrued interest. Is the fee charged even if the borrower defaults and the interest is unpaid?
No. In the case of a default term, no commission is charged.
How does Boober Italy differentiate itself from Zopa Italy?
We are a direct p2p lending market, while Zopa Italy is an indirect social lending service. It means that on Boober.it the relationship between lenders and borrowers is more direct, personal and warmer. The lender chooses his investments request by request, pondering the uniqueness of each borrower. It is not automatic like setting “I will lend money to all the C users rated in 24 months”. In Boober.it all the borrowers are called by name, not only by credit rating, as well lenders can talk with the borrowers through the personal forum which is opened under each published request. On the other side, the borrower has the freedom to design his personal loan, setting the amount and the number of terms and the rate. It means that, once he get the credit rating, he is not forced to accept conditions decided by the system as it goes on indirect social lending websites.
Does the average Italian know that Boober is an option for them to get a loan or invest their money?
Only partially because our marketing and communication coverage is very limited because we want to move very gradually into the market and the internet users in Italy are far less in percentage of active population compared to the other European Countries. However the p2p lending model had a lot of coverage from the Italian press during the last 12 months because was seen as an alternative to the credit crunch.
What have you learned about Italian borrowers that has surprised you?
The relationship with their banks. Many of them have been keeping a deposit account in the next-door-bank for several years. Nevertheless, when they have asked a loan to their banks, it has been denied or the bank offered expensive conditions. It sounded so strange.
What have you learned about Italian lenders (investors) that has surprised you?
Their expertise. Most of our lenders are used to invest in the stock market, so they know more than we expected about statistics, defaults, risk management, ratings etc. That’s a great opportunity to fine-tune Boober.it day by day thanks to their precious suggestions.
Do you have a story of sucess or a bit of feedback that you have received from your users that you’d like to share?
Yes, we have two interesting stories: one about a borrower, the other about a group of lenders. I start from this last one: Booberwatch (booberwatch.forumfree.net) is the name of the independent forum created by some of the lenders who wants to share opinions and information about Boober.it. Their suggestions and also their criticism is precious for Boober’s growth. The second story is about Checoale1, a borrower who got a 10000€ loan to buy solar panels for his house. It’s wonderful to see how ethical living and ethical finance found a synergy through Boober.it.
Based on the activity on the Booberwatch forum, what are the primary complaints that your lenders have? Which are your priorities to address?
Many complaints but we are really happy of that. It is the potential of web 2.0 and we want to capitalize their criticism. So, they would like to have more information about the borrowers, i.e. job, work contract, monthly income, other debits and so on. As i said before, many of them are very expertise and they would like to evaluate the risk on their own. We are working to give them as many information we can according to the Italian privacy rules. As well they encourage us to be more present on Booberwatch in order to settle a more constant communication between them and Boober.it. This issue will be also faced improving our social networking area, i.e. setting up an official chat, or an instant message service. Improving MyBoober, which is the account management system, is one of our priority, according to the complains of many users which defined it ‘not user-friendly at all’ and difficult to extract data. The new version has already being projected, we will realize it as soon as possible.
What is next for Boober Italy?
We would like to improve our social network features in order to let the users establish a stronger connection each others: i.e. detailed and customized user profiles, chat, or private messaging. As well the 2.0 side could be improved by user generated content like a Booberpedia (or a WikiBoober) where the users are invited to write the lemmas of a social lending encyclopedia.
What is the future of P2P lending in Italy?
We believe there are great opportunities for p2p lending in Italy because the Italian market is well behind other key European markets in term of personal loans and the credit rates offered by bank or other financial institutions are extremely unattractive and difficult to be released. If we accept the forecast of Garner Group in 2013, 10% of retail credit market will be done through internet p2p lending, for the Italian market we will talk about a credit volume of about 1.5-2 billion euro value.
Vittorio Levi, CEO of Centax S.p.A. and Boober Italy, was kind enough to answer some questions about Boober Italy and the state of prestiti personali in Italia, or P2P lending in Italy.
The most recent news from the Boober brand is that the original Boober site in the Netherlands was shut down earlier this year by Dutch regulators. Can you give us some information about whether Boober has plans to re-open in the Netherlands, and how Boober Italy is related to Boober Netherlands?
Boober.it started in November 2007 as a joint-venture between Boober International and Centax (which is a financial service Italian company mostly focused in check services). Boober Italy acted as a licensee of Boober International which was owner of the brand, the platform and the market rights for all of Europe. In October 2008, Boober International decided to discontinue their activity and Centax decided to buy 50% of Boober Italy, the Boober brand, the website platform, and the right to open sites in all European countries except for the Netherlands. As far as Boober.nl is concerned, we have no visibility of their plans but I believe they will not re-open in the future.
Do you have any plans to open Boober sites in other countries in the near future?
Our plan for expansion in other European countries will target 2010 after consolidation on the Italian market. Priority countries will be for us Spain, Portugal and eastern countries where the internet is growing rapidly as a business instrument (Romania, Hungary, Slovakia, Poland).
How is Boober Italy regulated? Do you have explicit regulatory clearance from Italian officials? Are P2P loans considered securities in Italy as they are now in the US?
Centax is a financial service provider, regulated by the Bank of Italy, and we have submitted the Boober peer-to-peer landing platform which was approved within the present frame of Centax activities. P2P Loans are permitted only between private individuals; this means that loans are not permitted between individuals and companies or between companies. In our business model we don’t issue loan to borrower but we manage the marketplace between lenders and borrowers, promoting the website on the net and providing a certain number of back-office services both to lenders and borrowers, the most important being the risk assestment and evaluation.
Boober.it launched more than a year and a half ago. How much in loans has been issued through Boober to date?
738,000 Euro and 123 borrowers have been funded by more than 300 lenders. We publish these statistics on the Boober.it home page (at the top). Currently our volumes are still too low for producing meaningful statistics month by month or day by day. When we reach higher volumes, more granular statistics will be made available.
What is the aggregate default rate to date on loans issued during your first year of activity (Nov 2007 – Nov 2008)?
The default rate is about 2%, concentrated in only a few loans. Looking at the statistics from Sep 2008 to nowadays, the default rate is 0%.
According to your lender fees page, Boober charges (but is currently waiving) a EUR 9.95 annual subscription fee. Is there a reason you have decided to waive this fee? How long do you plan to continue waiving the subscription fee?
The decision to waive the fee is related to promotional activity and we will keep it at least for the rest of the current year. Maybe it could be extended for the 2010, too.
According to your lender fees page, Boober charges a 10% commission on all accrued interest. Is the fee charged even if the borrower defaults and the interest is unpaid?
No. In the case of a default term, no commission is charged.
How does Boober Italy differentiate itself from Zopa Italy?
We are a direct P2P lending market, while Zopa Italy is an indirect social lending service. Meaning that on Boober.it the relationship between lenders and borrowers is more direct, personal and warmer. The lender chooses his investments request by request, pondering the uniqueness of each borrower. It is not automatic like setting “I will lend money to all the C users rated in 24 months”. In Boober.it all the borrowers are called by name, not only by credit rating, and lenders can talk with the borrowers through the personal forum which is opened under each published request. On the other side, the borrower has the freedom to design his personal loan, setting the amount and the number of terms and the rate. It means that, once he get the credit rating, he is not forced to accept conditions decided by the system as it goes on indirect social lending websites.
Does the average Italian know that Boober is an option for them to get a loan or invest their money?
Only partially, because our marketing and communication coverage is very limited. We want to move very gradually into the market and the internet users in Italy are a far smaller percentage of the population compared to the other European countries. However, the P2P lending model has had a lot of coverage from the Italian press during the last 12 months because it was seen as a positive alternative to the credit crunch.
What have you learned about Italian borrowers that has surprised you?
The relationship with their banks. Many of them have had a deposit account in the bank next door for years. Nevertheless, when they asked their banks for a loan, it was denied or the bank offered expensive conditions. It sounded so strange.
What have you learned about Italian lenders that has surprised you?
Their expertise. Most of our lenders are used to investing in the stock market, so they know more than we expected about statistics, defaults, risk management, ratings etc. We have a great opportunity to fine-tune Boober.it day by day thanks to their precious suggestions.
Do you have a story of sucess or a bit of feedback that you have received from your users that you’d like to share?
Yes, we have two interesting stories: one about a borrower, the other about a group of lenders. I’ll start with this last one: Booberwatch is the name of the independent forum created by some lenders who wanted to share opinions and information about Boober.it. Their suggestions and also their criticism is precious for Boober’s growth. The second story is about Checoale1, a borrower who got a 10,000 Euro loan to buy solar panels for his house. It’s wonderful to see how ethical living and ethical finance found a synergy through Boober.it.
Based on the activity on the Booberwatch forum, what are the primary complaints that your lenders have? Which are your priorities to address?
There are many complaints but we are really happy about that. This is the potential of web 2.0 and we want to capitalize on our customers’ criticism. Primarily, they would like to have more information about the borrowers, i.e. job, work contract, monthly income, other debits and so on. As I said before, many of them are very expert and would like to evaluate the risk on their own. We are working to give them as much information as we can according to the Italian privacy rules. They also encourage us to be more present on Booberwatch in order to enable more communication between them and Boober.it. We are also hoping to address this issue by improving our social networking area, i.e. setting up an official chat, or an instant message service. Improving MyBoober, which is the account management system, is also one of our priorities, according to the complains of many users who say it is ‘not user-friendly at all’ and difficult to extract data. The new version has already been designed, we will release it as soon as possible.
What is next for Boober Italy?
As I mentioned, we would like to improve our social networking features to enable users to establish stronger connections with each other: i.e. detailed and customized user profiles, chat, or private messaging. We also think the site could be improved by adding user generated content like a Booberpedia (or a WikiBoober) where the users are invited to write the entries in a social lending encyclopedia.
What is the future of P2P lending in Italy?
We believe there are great opportunities for P2P lending in Italy because the Italian market is well behind other key European markets in term of personal loans, and the credit rates offered by banks and other financial institutions are extremely unattractive. If we accept the forecast of Garner Group in 2013, 10% of retail lending will be done through internet P2P lending, which in the Italian market reflects a credit volume of about 1.5-2 billion Euro in value.
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