social lending - Payday Loans

APR 11, 2012 9:07 AM

Social Lending Company Encash Target The Middle Market

A new social lending company (also known as peer to peer lending) has launched this week called Encash and they claim that while Zopa and others in the market only lend to borrowers with an excellent credit rating, Encash will be targeting those in the middle market.

So who is in the middle market? According to Encash they are civil servants, nurses and teachers who earn between £20K and £35K and who, if they applied for a personal loan at the bank would probably get one but not at those great rates the banks like to advertise to us (who does get those rates?)

Lenders investing in Encash can expect more defaults from borrowers but they will be earning a higher rate of interest so should in theory get a better return on their investment for a slightly higher risk.

Encash are not a new company but rather a rebrand. They were formerly known as Yes-Secure, another social lending business but this time targeting people with poor credit ratings.

It failed big time and loaned out just half a million quid in the entire last year of business – Zopa on the other hand loaned out at least £8 million a month!

The reason Yes-Secure failed wasn’t a lack of borrowers but rather a lack of lenders who were put …