See 57 financial technology startups in one day

At Prosper Lending Review we are not only interested in p2p lending - all financial technology startups capture our attention. For this reason, we are quite excited about FINVOATE Startup 2009 which will be held in San Francisco on April 28, 2009.

The regular ticket prices for FinovateStartup09 will expire today (April 17th) at midnight. Register before the end of today and save $100 off the last-minute ticket prices. Use offer code fan109 to save an additional $100 on the ticket price.

FINOVATE Startup is billed as the "largest group of financial technology startups ever assembled in one place" with 57 companies in the lineup. All the major p2p lending players will be there including Lending Club, Pertuity Direct, and Prosper.


Here is a complete list of companies:

• Acculynk
• AlphaClone
• Aradiom
• Bay Area Software
  
• BillShrink (our review)
• BudgetPulse
  
• BudgetTracker
  
• CalendarBudget (our review)
• Centrro
• CircleUp
• Cooler Inc.
  
• CreditArray
  
• Credit Karma (our reviews - 1,2)
• DebtGoal (our review and new features launched)
  
• Expensify
  
• GoalSpring
  
• Green Sherpa (our review)
• Home-Account
• HomeATM
  
• iBearSoft
  
• IOUSOS
• iThryv
• Jwaala
  
• kaChing
• Kapitall
  
• Lending Club (Update: new lender feature announced at Finovate)
  
• LendingKarma (our review)
• Looniesdesk.com
• LowerMyAssessment.com
• Micronotes
• Mint (our review)
• MoBank
• Moneta
• Mozo
  
• NCore
• OurCashFlow
• Pennyminder
• People Capital (our review)
• Pertuity Direct (our review)
• Portfolio Monkey
  
• Prosper (Update: re-launched at Finovate)
• Rudder
• SecondMarket
• SeerGate
  
• Silver Tail Systems
  
• SimpliFi
  
• SmartHippo (our review)
• Strands
  
• Syphr
• Tempo Payments
  
• The Receivables Exchange
• ThreatMetrix
  
• Transparent Financial Services
• Valuecruncher
  
• Victrio
  
• Wesabe
  
• WeSeed
• ZimpleMoney (our interview with founder)

Makeover at DebtGoal.com

I posted earlier this month about DebtGoal.com, one of the many up-and-coming financial services companies that will be participating in FINOVATE later this month.

I wanted to let Prosper Lending Review readers that the site has gotten a dramatic face-lift today and is far easier to use and navigate. Data-entry is simpler and the results more useful.

The interface has a much better "Web 2.0 feel" and the charts and tables are relevant and well-placed. Overall, it is intuitive and comfortable.

They are not yet aggregating but that is in the works. I've also suggested a couple of ideas that would be helpful--for instance, flagging recurring transactions. I'm really encouraged by how quickly this company is jumping to implementing user recommendations.

If you haven't checked out DebtGoal.com yet, or if you have and didn't like what you saw, I encourage you to give it another try.

At Finovate 2009 Budget Solutions Abound

Holy budgets Batman! Finovate 2009 is showcasing no less than ten (count them 10!) budget solutions for personal finances. I explored some of these on my blog this past week as I wrote all about budgeting for a week, but there’s a lot out there and I couldn't do them justice there.

For the sake of the reader, I’m going to make some categories here to differentiate what might be right for your style as a prospective user or curious reader. Some of these will overlap due to the nature of the features. All are free to use unless otherwise noted. The denotation ($) means fee-based and (*$) means free during Beta trials, or some features are subscriber-based.

I included a “social media” category here—because two of these are very similar to common social applications. Wesabe is a lot like Facebook in that people can recommend or comment and share information. Geezeo has a lot of Twitter-like features and their “confession booth” even integrates with Twitter (not to mention, it's outrageously addictive).

Rudder is in a bit of a class of its own. It appears to include bill-pay features (note to self to play with this one a bit more).

There are essentially two "classes" of personal finance application in my view. Those that require data-entry of transactions, and those that don't. Otherwise, the items below appear in no particular order and none of these are paid placements.

Aggregator
Green Sherpa ($)
Mint
Wesabe
Geezeo

Quicken (*$)
Rudder

Data-Entry

iBearSoft (mobile only) ($)

LooniesDesk (*$)

BudgetPulse

CalendarBudget (*$)

Social Media Features

Wesabe

Geezeo

Mobile Apps
Mint
Green Sherpa ($)

Wesabe
Ibearsoft (*$)
LooniesDesk(*$)

Peer to Peer (p2p) Lending in Japan

Several companies are entering the market in Japan to offer p2p lending services.

Japan has securities regulation that is similar to the US, which provides a substantial barrier to entry into the marketplace.

Two providers of p2p services have made it through the hurdles and two more are online to launch soon.

Maneo, which launched in October 2008, offers unsecured peer-to-peer loans. The guaranteed loan “G-Loan” product is providing lenders with a guaranteed 1.5% interest rate, substantially greater than the average .25% savings account interest. Other loans are fixed at 7, 8, 9.5, 11 and 12%.

Another option for lenders who know one another is Aqush Tomo, which provides loan documentation and servicing, but doesn’t actually do the banking parts of the transaction. These loan documentation and payment reminder services are available similar to Lending Karma.

Two other well-known p2p players, Prosper and Zopa are planning expansion into Japan, but are not yet online.

Jessica Ward is a freelance writer and blogger who writes on personal finance among other things. She also blogs at www.pennywisefamily.blogspot.com.

Pertuity Direct Sees Rapid Growth

In an email to members, Pertuity Direct's management team said thousands of people have joined the p2p lending platform and their membership has grown by 300% from February to March. Here are some additional statistics about current PD borrowers:

• $15 Million in loan demand in the first few months
• Average Credit Score: 737 ("Super Prime")
• Average Interest Rate: 13.6% (range is 8.9-17.9%)
• Average Loan Amount: $14,600 (range is $1,000 - $25,000)

The average loan amount is up significantly from $9,800 reported last month while the average credit score has remained steady. Pertuity Direct launched in January and is one of two p2p lending companies registered by the SEC to operate in the US.

Our previous coverage of Pertuity Direct:

• March 2009: Pertuity Direct reaches $500,000
• March 2009: CEO Kim Muhota explains the unique lending model
• February 2009: Jessica's interview with CEO Kim Muhota - Social lending meets mutual funds
• January 23, 2009: Pertuity Direct removes beta label; launches officially
• January 2009: Jessica's Pertuity Direct Review
• December 2008: Pertuity Direct to launch 'immediately after the New Year'

Ever wonder how microcredit works under Islamic law?

How does finance work when falling Islamic law (Shariah)?

A longstanding problem in the adoption of microfinance in the Arab world is adapting the programs to work for followers of Islam. Muslim Law (also called Shariah) has several tenets that contradict traditional financial systems including:

• Payment of zakat (charity)
• No riba (interest) paid or earned
• Socially-responsible investing/saving (Gharar)

In order for microloans (or any loan product) to be Shariah-compliant, it is generally structured through a trust-sale known as a murabaha—a negotiation of profit margin, rather than interest—into the final price. It’s sort of like paying your mortgage in all points, without annual interest. This sort of loan is called a Qard al-Hassan, or benevolent loan.

Naturally, this format is difficult to translate into microfinance, but many organizations and banks which cater to Muslim borrowers are springing up. Currently there are 265 banks operating in 40 countries with assets in excess of $262 billion USD. Even commercial giants such as CitiGroup are adapting to reach this growing population.

Similar to debt, interests are also structured to be socially-conscious and non-interest bearing, looking more like leases of capital.

I hope you’ve enjoyed learning this different financial paradigm. It sure has been an education for me.

Jessica Ward is a freelance writer and blogger in Seattle. She also writes at www.pennywisefamily.blogspot.com.

Micro-Grants, in Person-to-Person fashion: DonorsChoose.org

DonorsChoose.org facilitates privately-funded Micro-grants benefit students in the classroom. The non-profit was founded in 2000 by teachers in the South Bronx as a way to help support their classrooms.

The platform allows donors to choose the classroom and project that they would like to fund. From literacy and music programs, all the way down to “we need more pencils.” Donors can contribute any amount they want to support these classroom projects.


Prospective donors can sort by the urgency, geographic location, academic subject or even the poverty level of the school program they would like to support.

DonorsChoose has received a four-star rating from Charity Navigator, and 86% of their income directly supports programs. Also, their nearly $16,000,000 budget is entirely supported without government support—driven only by donors.


If a program is not fully funded by the date the funding is needed, the money is returned to the donor, who can reinvest it in another project.

Jessica Ward is a freelance writer and blogger in Seattle. She also blogs at http://www.pennywisefamily.blogspot.com/.

Finovate 2009: DebtGoal.com Review

In case you’ve forgotten, Finovate 2009 begins on April 28th. In advance of the conference, we’re profiling a lot of the presenting companies. One of these companies is GoalSpring’s DebtGoal.com product.

DebtGoal.com is a free tool intended to help users get out of debt. I’ve had a few conversations with the DebtGoal team (I’m an alpha-tester) and they really are passionate about helping people get out of debt, and stay out. While DebtGoal is currently a little rough around the edges, I’m excited to see what’s coming up next—as I know they’re working on some new projects.

Right now with DebtGoal you enter your debts, payments and interest rates (no account numbers or other scary things), aggregation is “in the hopper” in the next phase rollout, but at this point everything is manual data-entry. I’m hoping that they’ll allow an “enter manually” option for technophobes who are nervous about the aggregating systems. I personally love them, but I can understand those who don’t.

Using your outstanding debts and interest rates, DebtGoal produces a payoff plan for you and suggests paying off in the order of highest interest to lowest interest, and based on the minimum payment requirements, it sets payment schedule for you, based on your budget and priorities for these debts. I personally adhere to the “snowball method” of paying the smallest balance first, closing the account and then moving on to the others. I’ve requested that DebtGoal provide both options. Not sure if they’ll be able to incorporate that feature, but it seems like both methods are sound.




Why use a system like DebtGoal? I think it can help if you’re juggling multiple credit accounts and overwhelmed by deciding what to pay on what account. Perhaps you find yourself paying minimums only because you can’t decide or don’t know what to do about the next one. Then you’ll just make a big payment with the “extra” at the end of the month, right? DebtGoal encourages you to make a goal and stick with it. It can also help you plan your monthly budget so you know how much to set aside for each bill.


Another nice feature is that it shows you how long it will take you to get out of debt if you pay only minimum balances. I set a goal to be debt free by the end of this year, and adjusted my Mint.com budget accordingly. You can chose either a desired debt-free date, or tell DebtGoal your desired combined monthly debt-payment budget, and they will show you the smartest way to allocate, and provide you with a debt-free date based on that plan.


One feature that I really like, and haven’t seen other places, is that it shows new spending separately, by basically showing you that you have to pay A: your regular debt-busting budget amount and B: your new spending to keep up on your goal.

I’ll attach a screenshot here, but for my pride’s sake, I’ve removed my account balances. Rest assured, this will be paid off by year’s end. I’m on track!

If you have debt and you’d like a nice graphical way to tackle that, I’d encourage you to give DebtGoal.com a try!

LendingKarma poised to launch at Finovate

**Disclosure: This post has been edited. Since it's original posting, we have been contacted by Lending Karma founders with new information and have adjusted the post accordingly. Changes in bold.


Sometimes I just can’t get enough Karma.

Here’s another “Karma” company that will also be presenting at Finovate 2009 later this month. LendingKarma.com isn’t officially launched yet, but I used Google’s handy cache system to investigate further to see what they’re all about. They appear to be a re-branding of the San Francisco-based company LoanBack.com, which provides a system for generating promissory notes. (LendingKarma.com went live on 4/7/09). LendingKarma is not affiliated wtih Loanback.com, except that LendingKarma's founder was once a founder of LoanBack, but left the company a few years ago. Lending Karma is a compeitor but plans to add additional services in the near future.

I’ve investigated LendingKarma with the SEC and was unable to find a record of them, so I’m presuming the business model remains the same: To provide a system for creating a mutually-agreeable peer-to-peer loan. They offer services to “invite” someone to lend to you, based on the agreement you write up with the assistance of their system. They also provide email reminders to the borrower about payment. Both companies are based in San Francisco.

According to cached LendingKarma.com pages, rates for services vary from $29.95 to $59.95 per year.


In my house, I’ve recently had occasion to write up a simple promissory note for my ten-year-old daughter. I’m happy to loan her a little bit of money (I think the balance owed is $10.00) but I can see that later on in life, I would like to be able to loan her money in greater sums, with understanding the payment expectations. If I were to loan a teen or young adult money for a car or home downpayment, this might be just the product I need.

LendingKarma doesn’t appear to handle the collections but does remind borrowers of a balance owed, and tracks the amount outstanding, which could help manage both parties’ recordkeeping. It also provides a legally-enforceable promissory note. As the old adage goes, “good fences, make good neighbors.” This written agreement is tailored to be specific to the circumstances and may reflect a secured, or unsecured loan. Also, being enforceable could settle a financial dispute without damaging an existing relationship.

Jessica Ward is a freelance writer and blogger based in Seattle, WA. She also blogs at http://www.pennywisefamily.blogspot.com/.

CreditKarma: Never Pay for Your Credit Score Again!

I feel like a moron. Just two weeks ago I paid $14.95 for three-month access to my credit score. Let me tell you a little story about how this began:

My neighbor, four doors down, has the same name as me, with the minor difference of a different middle initial. Her middle initial, happens to be that of my maiden name. Because I hyphenated my last names for the first few years after I was married, I have a registered “credit alias” that is exactly the same as her name, and a mailing address just a few digits off.

That really isn’t too much of a problem, except that because our addresses our so similar, and she doesn’t pay her bills, her collections accounts arrive on my credit score routinely.

Four more of these recently appeared on my credit report and were discovered by my mortgage bank during my refinance. I shot off another letter to TransUnion last week hoping to intervene before my rate-lock was threatened.

I’ve got to say, I’m pretty tired of paying for my own credit score. Yes, you can get a credit report free annually, (just one) but it’s far more helpful in a situation like mine to check it more frequently than that.

Finovate 2009 presenter, CreditKarma may be the solution people like me are looking for. It provides constant, free access to your credit score as well as some other features.

You can see how your credit score stacks up to those in your age range, state, or even email domain. You can also use their calculator system to see how adjustments in your financial situation would affect your score in theory. Would it help or hurt you to close a high-interest account, extend your credit limit, or even file for bankruptcy? I was surprised to know that paying off my credit card balance entirely will actually hurt my score, and that optimally I should be carrying some credit card debt. (Thanks anyway, but I’ll still be going debt-free). There’s a screen to view your long-term credit score over time, which will be very helpful for tracking identity fraud or excessive credit inquiries (which cost you points).

The site is free because of sponsorship (think Mint), but I found the sponsorship to be rather oppressive and cluttering. However, not so much that I won’t be using CreditKarma. Also, be reassured, that they fund the site through ad partnership only, not through selling your personal info.

There are some features that I especially like including a credit card debt calculator which allows you to either enter your projected monthly payment and calculate a payoff date, or enter a date and it will show you your estimated monthly payments. Adding a little extra value to this calculation is their friendly nudge that shows you how much you can cut your payoff time by paying just a little bit more.

At this time, CreditKarma is only showing credit scores from TransUnion, and not Experian and Equifax, but in my experience, TransUnion’s scores have always been the lowest (They’ve also been the only ones routinely confusing my neighbor’s accounts with mine).

Because CreditKarma is requesting your score on your behalf rather than for a lender, your credit score won’t be affected by the inquiry.

Jessica Ward is a freelance writer and blogger located in Seattle, WA. She blogs on finance, credit, family and food at http://www.pennywisefamily.blogspot.com/.