Meanwhile, north of the border, Canada’s first marketplace lender, Grouplend, recently announced an expansion that now has us serving customers for nearly the entire country, with two remaining provinces still in the works. Nine years after Americans first found value in borrowing from their peers online, Canadians are now benefitting from a similar opportunity.
Canadians face significant challenges when it comes to borrowing money in the current economic and competitive environment. Borrowers in Canada didn’t experience the same credit crunch that their American counterparts did in the wake of the financial crisis, but a much different problem is plaguing their pocketbooks. Lack of innovation and competition arising from the oligopolistic banking market has led to Canadians paying some of the highest fees and interest rates in the western world.
A conservative attitude helped Canadian banks avoid much of the impact of the financial crisis, with the big five players’ profit levels surpassing pre-crisis levels by the end of 2010. Net incomes of the country’s largest banks has skyrocketed to a record high of $31.9 billion in 2014, up from $19.2 billion in 2007 before the onset of the financial crisis. Meanwhile, average Canadian consumer debt excluding mortgages will swell to more than $28,000 by year’s end, another all-time high.
Since launching earlier this year, Grouplend has been following a similar model to Lending Club by directly pairing borrowers with investors and employing innovative technology to significantly reduces fees and interest rates.
Banks are making a fortune, and they’re taking it right from the pockets of everyday consumers through exorbitant fees and high interest rates on credit cards and consumer loans. Online lenders are an alternative to that. We think responsible, middle class people deserve more affordable access to the money that they need to live their lives.
We’re banking on the fact that Canadians feel the same way.
Grouplend (www.grouplend.ca), Canada’s first online lending platform, is challenging the status quo in Canadian banking by offering more affordable rates on personal loans and delivering a friendly, personalized customer experience. The platform uses custom-built technology that allows Canadians to apply and qualify for a loan in under 3 minutes — all without affecting their credit score. Entirely online and easy-to-use, Grouplend makes borrowing refreshingly simple.