Longtime Springwise readers may remember Kiva, the venture we wrote about back in 2006 that facilitates charitable microloans to entrepreneurs in the developing world. Now the organization has found a way to make loans go even further through a partnership with credit card issuer Advanta.
Earlier this month Advanta and Kiva announced the KivaB4B Project, an initiative through which Advanta will match the loans made by holders of its business credit card with up to USD 200 per month per card. Card holders simply select a business owner to sponsor through Kiva and make a grant using their Advanta BusinessCard. Advanta matches that grant, dollar for dollar, and Kiva distributes the total resulting funds. As the funds are repaid, they get deposited back into the card holder's Kiva account, while the match funds go back to Advanta. In the meantime, donors get materials to publicize their support, such as a KivaB4B button to put on their website, stickers for their storefront and postcards to send to customers.
Started in 1951 with USD 30 in seed money, Advanta is now one of the largest credit card issuers in the US small business market. Ami Kassar, Advanta’s Chief Innovation Officer, explains: “In our years of working with small business owners, we’ve found that many of them remember the moment someone gave them inspiration, some good advice, or a little cash to get things going. Now, through KivaB4B, American small business owners can offer that same ray of hope to entrepreneurs in developing countries.”
San Francisco-based Kiva has already opened a whole new world of opportunity to entrepreneurs in developing countries—it's facilitated more than USD 27 million in loans since its inception in 2005. With the power of a major bank behind it—and a little cause-related marketing incentive for donors—there's no telling how far its effects might go.
Website: www.kivab4b.org
Contact: aholderer@advanta.com
Spotted by: Susanna Haynie
Slated to launch this summer, Wells Fargo’s vSafe is a secure online location where customers can upload and store copies of everything from the deeds to their homes to precious family photos. The bank also uploads each customer’s bank statements to the vault, which can be accessed by logging on to customers’ regular internet banking accounts.
Reported fees of USD 4.95 for 1 gigabyte to up to 14.95 for 6 gigabytes might seem high when you consider that webmail accounts like Gmail and Yahoo offer multiple gigabytes of storage space at no cost. But Wells Fargo adds layers of security and throws in a dedicated phone help line. Plus it provides a single, central location for an individual’s or family important documents. Wells Fargo claims it is the first large financial services company to offer virtual storage of vital documents. In the Netherlands, ABN Amro Bank offers a similar service: Digitale Kluis (digital safe). ABN Amro’s safe stores a maximum of 500 MB of storage for EUR 14 per month, and is accessible to anyone who has access to an account holder’s online banking—including authorized accountants or family members.
The focused service is an order removed from the general purpose online storage services that have been available for years. Whether or not the US bank can make the service pay, imitators are sure to enter the space. Besides competition from other financial service providers, look for online storage firms to bundle-in virtual vaults as part of their regular offerings.
Website: www.wellsfargo.com — www.abnamro.nl
Contact: www.wellsfargo.com/help
Spotted by: Bill McMahon
Consumer credit is ubiquitous and the notion of saving up for something is almost foreign. But it's an essential step toward regaining control over spending, and SmartyPig wants to help.
Iowa-based SmartyPig offers a safe, secure way for consumers to save towards a specific goal—a wedding, remodeling project or vacation, for example—and it adds a dash of social networking and added incentives to speed up the process. Users begin using the free service by creating a profile on SmartyPig and establishing a savings account and goal amount—anywhere between USD 250 and USD 100,000. (SmartyPig's banking partner is 115-year-old, FDIC-insured West Bank, which has assets of more than USD 1.3 billion.) SmartyPig, in turn, suggests a monthly contribution in order to meet the savings goal by the time it's needed, and each month it deducts whatever amount the user chooses from their existing checking account or other funding source and puts it into the SmartyPig account.
To enlist the help of family and friends, users can choose to make their account public, enabling those they know to help them meet their goal; they can also put a SmartyPig widget on their MySpace or Facebook page to enlist the whole world's help. SmartyPig members can contribute to each other's accounts for free; to contribute via credit card, the fee is 2.9 percent. Once users reach their goal, they can receive their savings plus 4.30 percent (APY) interest on the SmartyPig MasterCard debit card, or they can get it plus interest and additional savings of up to 5 percent on a gift card from some of the country’s top retailers, including Amazon.com, Best Buy, Staples and Marriott.
SmartyPig just launched in February, with plans for a major publicity campaign to begin this month, but it was already awarded "Best of the Web" by NetBanker in March. It's open just to US consumers, however. Time to bring this concept to the credit-laden community near you! (Related: Layaway is back.)
Website: www.smartypig.com
Contact: support@smartypig.com
Spotted by: Sarah Johnson
Aiming to invigorate a stagnating housing market, Dutch ING Bank is helping potential buyers bid on houses that aren't yet for sale.
The bank's WoonWaarUWilt ("LiveWhereYouWant") initiative, which launched yesterday, lets clients make an offer on the house they'd love to own. ING is partnering with online real estate firm iBlue. After potential buyers fill in a form on www.woonwaaruwilt.nl, including their dream home's address and the initial offer they're willing to make, iBlue contacts them to discuss whether the offer is reasonable, and adjusts it if necessary. A mortgage consultant also determines whether the buyers would be able to finance the purchase.
iBlue then sends a preliminary offer to the property's current owners, explaining the situation and inquiring whether they'd consider selling. As with other 'Intention Economy' real estate ventures we've covered before (in Finland and elsewhere), the reasoning is that many homeowners aren't actively interested in selling, but can be persuaded to do so if the right offer comes along. By declaring their intention and backing it up with a lender’s financial approval, buyers can help eliminate the uncertainty associated with putting a house on the market. Meanwhile, the concept is a smart way for ING to get a head start on other banks when it comes to financing the transaction.
Making an offer is free for clients, but if the owners are interested in pursuing the offer, iBlue acts as the buyer's agent and charges a commission once the deal is done. The Intention Economy was first described by Doc Searls as follows: “The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them.” Which offers exciting opportunities for businesses who are willing to shift from marketing to buyers, to facilitating their intentions.
Website: www.woonwaaruwilt.nl
If the current sub-prime lending crisis in the US and the UK proves anything, it’s that even traditional lenders can act irresponsibly, despite the myriad government regulations designed to hold them in check. That sobering fact, together with the tightening liquidity and a possible upcoming recession, should give a boost to so-called peer-to-peer lending. For the uninitiated, P2P lending websites directly match borrowers seeking relatively small amounts of cash with private individuals willing to lend them the money. Borrowers post their needs, lenders make offers and everyone benefits from bypassing lending’s traditional middlemen who package loans for a fee.
We first looked at P2P lending nearly three years ago when we profiled Zopa, a UK start-up which we described as “like eBay for money”. Since then we’ve covered other fast-growing P2P start-ups in the US, the Netherlands, Germany and China. And last week, Fynanz, which focuses solely on loans to students.
The latest entrant on our radar screen is Fosik, which brings P2P lending to Australia. Like its counterparts elsewhere, Fosik touts the benefits of using the site’s tools as a way to formalize lending arrangements among family members and friends. Plus, the site notes that investors—whether they know the people they’re lending to or not—can benefit from returns that reach 10 percent or higher.
Meanwhile, signs abound that the P2P lending is rapidly maturing. Prosper is seeking to create a secondary market around its loan portfolios. This would allow lenders to get quick cash by selling their loan portfolios to other investors. Is it too late for entrepreneurs to get into the P2P lending space? Probably not. Whether launching in new markets, targeting specific audiences or offering different types of financial services, there’s still plenty of room for peer-to-peer banking to grow.
Website: www.fosik.com.au
Contact: www.fosik.com.au/About/Contact.aspx
Spotted by: Tom Flaherty
Peer-to-peer lending is no longer a new concept, with marketplaces like Zopa, Prosper and others already out there, vying for consumers' attention. But while most such sites facilitate general-purpose lending, Fynanz appears to be the first to take a niche approach with a service dedicated to funding student loans.
New York-based Fynanz, which is gearing up to launch in select states within the next quarter, offers students an "open loan" process for financing their education. To apply for a loan, students fill out an application and create a personal profile, including the amount and interest rate desired. Tapping into 15 years' worth of student loan data, Fynanz uses that information to give each student a grade and place them in one of six groups reflecting both their credit score and their academic characteristics, among other things. Individual lenders including friends, family and alumni of the institution the student attends are then given priority as they bid alongside lender networks to fund the loan. The more participants bid on the loan, the lower the winning rate is likely to be, Fynanz says. Servicing fees will be "no more than" what other marketplaces charge, company CEO Chirag Chaman says, but there will be no application fees or hidden costs for borrowers. For lenders, meanwhile, the benefits are attractive returns and the knowledge that they are performing a social good.
Fynanz's platform is built using the same characteristics that traditional lenders use, preserving the legality and distinct tax status of the education loan, Chaman explains. There is also likely to be increasing demand for student loans, he predicts: "I came from the student loan world, and there are some big problems there. Those cracks have turned into huge gaps over the last year, and personally, I think the worst is yet to come. People used to dip into home equity, but that's not there anymore."
The P2P lending market, meanwhile, could grow to between USD 5 billion and USD 10 billion in annual volume within 10 years in the US alone, according to data released this week by Online Banking Report. Is there room for niche players? Time will tell. Keep an eye on this one! (Related: Person-to-person loans for home buyers.)
Website: www.fynanz.com
Contact: customer.care@fynanz.com
Spotted by: Ozgur Alaz
Back in 2005, we covered Norwich Union's Pay-as-You-Drive program in the UK to charge consumers for auto insurance based on how often, when and where they use their vehicles. Starting in Texas, the United States will soon see a similar service for the first time thanks to MileMeter's "auto insurance buy the mile."
Like Norwich Union's offering, MileMeter will use consumers' usage levels to determine how much they must pay for auto insurance. Unlike Norwich Union's, however, MileMeter will not use any kind of vehicle tracking device to record that usage. Rather, consumers will buy coverage in advance in increments of as few as 1,000 miles; when their odometer reaches the end of that increment, the coverage expires. The cost per mile varies with the geographic area and the age of the driver, but a reasonable ball park for a 30-year-old driver and minimum coverage in a midrange urban ZIP code in Texas might be 4 cents per mile, MileMeter CEO Chris Gay says. Multiple drivers in a household can also be covered for a single vehicle.
Dallas-based MileMeter will launch in Texas this summer, with plans to roll out quickly to other states, Gay says. In the meantime, it's attracted a fair bit of attention, not least because it was one of only seven finalists in the most recent Amazon Web Services Startup Challenge. Because it doesn't use gender as a basis for determining rates, MileMeter has been ardently supported by the National Organization for Women (NOW). And by rewarding drivers who use their cars less, it has the potential to make an environmental impact as well. Sounds like a win-win all around—time for more entrepreneurs to start thinking in increments!
Website: www.milemeter.com
Contact: curious@milemeter.com
Spotted by: Ozgur Alaz
Some 47 million Americans, or 16 percent of the population, do not have health insurance, according to the U.S. Census Bureau's last count, and that number is on the rise. Little wonder, then, that Pennsylvania insurer Highmark recently rolled out what appears to be the nation's first prepaid gift card designed specifically for healthcare expenses.
Launched in November, the Healthcare Gift Card can be stocked with anywhere between USD 25 and USD 5,000 and used to cover expenses including co-pays at doctor’s offices and pharmacies; dental care, including braces and teeth whitening; vision care, including eye exams and prescription sunglasses; memberships at health clubs; and elective procedures such as Lasik and cosmetic surgery. Providers must simply accept Visa debit cards in order for the Healthcare Gift Card to work. The cost of the card is USD 4.95 plus shipping and handling, and a maintenance fee of USD 1.50 per month is imposed beginning in the ninth month after the card is purchased, for as long as a balance remains. Corporate orders are available as well.
It remains to be seen what changes, if any, the upcoming U.S. presidential election will bring for the nation's uninsured, but in the meantime, a prepaid card makes a great deal of sense. In addition to the obvious benefits for uninsured consumers, such cards could be a great branding opportunity for pharmacies and other health-related organizations, which could offer them under their own names much the way retailers already offer traditional gift cards today. Of course, the United States is not the only nation without universal healthcare—also one to bring to other parts of the world?
Website: www.givewell.com
Contact: info@givewell.com
Spotted by: Susanna Haynie
