A new face will soon arrive on the Irish peer-to-business lending scene.
Grid Finance is a platform crafted for the tech-savvy, and will incorporate a number of different products. Investors will be able to lend to small businesses for an interest rate which they play a role in determining. In typical “marketplace lending” fashion – the more competitive the loan auction, the lower the cost of borrowing will be driven down. The platform will also facilitate interest-free donations to charities and community organizations.
Derek Butler, Chief Executive of the platform – formerly of aid agency Goal, Goodbody Stockbrokers and EY, explained the proposition:
"What we're trying to do is much of what a community bank does without being a bank...we're all about innovating in the banking sector and bringing new, funky financial products into the Irish market that really fulfil the needs of the connected generation."
The platform has already secured funding from a number of high profile investors, including Enterprise Ireland and Kilcullen Kapital Partners. There is reportedly a queue of businesses and community organizations ready to make use of the platform upon launch. Grid Finance will not be regulated by the Central Bank of Ireland – but Mr. Butler indicated that the platform will be adhering to the standards set by the UK market:
"We don't see that as a significant barrier to adoption... We have built our system to be as bank-like as possible, we have client asset accounts, we have full anti-money laundering procedures."
"As and when regulation is introduced, we will be already compliant. We're following best practice in the UK, where there is a regulatory framework."
"I think regulation is an important part of this whole alternative finance market, and I think we would certainly welcome it."
It’s fair to say that peer-to-peer lending hasn’t exactly caught fire in Ireland up to now. But some believe it’s only a matter of time. Simon Deane-Johns – Co-Founder of the world’s first peer-to-peer lending platform Zopa – predicted an imminent surge of peer-to-business lending activity in Ireland back in January. Mr. Dean Johns suggested that the sector could expand by €100 million by 2017.
There are two platforms currently operating in the Irish P2B space. The first is Linked Finance. The second is a platform that launched in January 2014 called Our Money. Confusingly, Our Money was founded by Derek Butler and Sean O’Riordan – the same pair behind the newly launched Grid Finance platform. O’Riordan is to become the COO for Grid Finance, a role he also holds with Our Money.
We covered the launch of Our Money at the start of 2014. The platform was poised to target SMEs, community organizations and charities – a highly similar remit to that of Grid Finance. It’s not quite clear what’s going on. We might be witnessing an early-stage rebrand – but the Our Money platform appears to be alive and well. We’ll probe for an answer.