2008 06 Friends Clear@Nyse Euronext

P2PLending - Social lending Is it really new ? Is it going to be big ? June 30th, 2008

" Gartner predicts that by 2010, social-banking platforms will have captured 10 per cent of the available worldwide market for retail lending and financial planning "

- Gartner , february 2008 –

Glossary :

Web 2.0 = Web with social media features

Social banking = banking with social media features

Social banking is sometimes called banking 2.0

Social lending = P2PLending (peer to peer)

Social media is changing the Financial Industry

Social media is here to last

fy 2007 rev : 550 M$ 115 M visitors/month

Social media: for everybody, for any purpose

Social media impact for the financial industry

New ways of information propagation (blogs, Wesabe or Mint websites) -> new marketing is required

New business models: social lending, social money, P2PVenture,…

2007 rev : 150 M$ 50 M visitors/month

Banking 2.0 landscape (as of June ’08) Banking 2.0 Social lending, P2PLending P2P Venture Social Money -Expenses tracking Personal Finance Management Marketplace + social media features (« eBay for money ») Marketplace / no social media feature (UK) P2P payments purchase (2007) Caisse d’Epargne (France) OTC (Over The Counter) Social media P2P : Peer to Peer (Lending) OTC : Over The Counter Mobile banking

P2PLending: OTC, Marketplace, w/ social media features (or not)

No marketplace, no social media features

Loans between family and friends: OTC

Valuable services helping folks "formalize" what are sometimes very informal loan agreements

CircleLending (now Virgin Money US ). Founded 2002

LoanBack

A marketplace with no social media features

Zopa GB (March 2005)

A marketplace WITH social media features

Prosper US (Feb 2006)

Zopa US

P2PLending is the oldest " form factor " of credit

ROSCA (Rotating Savings and Credit Association)

Ekub (Ethiopia), Lun-Hui (China), Consorcio (Brazil), Tontine (France),…

Cooperative banking

Caisse d’Epargne (France): founded 1818

Caisse Desjardins (Canada): founded 1900

Credit Unions

Microcredit

Grameen bank: founded 1976-1883 (Muhammad Yunus, Nobel Peace Prize ’06)

Kiva: founded Feb-Oct 2005

P2PLending: cut out the middleman How to mitigate risk? Bank takes risk Bank Bank Borrower Lender Personal relationship Friends & family loan (P2PLending OTC) Business Model Lender #2 P2PLending Marketpkace Borrower #3 Source > Deutsche Bank Research August 2006 OTC = Other the Counter Peer pressure and/or diversification + social media features (optional) Lender #1 Lender #3 Borrower #1 Borrower #2 1 loan = 1 lender + 1 borrower Borrower Lender

Current figures

Loans originated by:

Prosper: 155 millions USD (within >2 years)

All Prosper stats are public, OpenSource !

http://www.prosper.com/lend/performance.aspx

Zopa UK: 40 millions USD (within 3 years)

Zopa GB data were not disclosed until ’08

How to compare?

French loan market (mortgages excluded): 75 billions euros originated each year…

" No brainer " (US VC’s verbatim)

It IS going to be big

A very strong product in a credit crunch market

A genuine product on true people

Not another subprime asset: " you know your borrower "

US Forecast (Celent Study) US P2P loans market : 2007 : 600 millions USD 2010 : 5,8 billions USD

The rise of a Global Industry P2P : Peer to Peer (Lending) OTC : Over The Counter Some local barriers to entry (banking regulation, lack of positive credit scoring,…)

FriendsClear: French 1st P2PLending service

Loans between family and friends who do work French launch: Summer ’08 Contact: Jean-Christophe Capelli, CEO Corporate Website: http://www.friendsclear.com Personal Blog: http://jeanchristophecapelli.com +33 (0)6 14 73 23 46