iGrin resumes P2P lending

Peer-to-peer lender iGrin is coming out of hibernation, with backing from some West Australian investors.

Tim Dean and Michael Stratman are the new directors. They bought iGrin from its founder, Phil Hopper, a year ago.

iGrin was the first and for a long time the only peer-to-peer lender to get into business in Australia. It had a vision of establishing a new niche that could mimic the success of offshore P2P lenders such as Prosper.

Its achievements and lending volumes were modest. It traded for a couple of years before scaling back in 2008, partly because of hurdles around licensing.

There is another P2P lender, SocietyOne, now in the Australian market. It is a more recent start-up, though at this stage it sources funds only from wholesale investors.

Yesterday, iGrin emailed previous investors and borrowers to advise them of its "relaunch" from September, when it will operate through Peer Lending Pty Ltd.

The email said iGrin was aiming to raise A$5.2 million in loanable funds.

iGrin pitched a return of "up to 12 per cent on your investments." It said "money can be invested for a six month term or 12 month term."

Initially, funds may be invested in loans acquired from other short-term and specialist lenders.

The investment pitch also says that "if a borrower defaults we carry the loss, not you", a shift in the iGrin model. Investors previously wore the loss on loans they'd selected to invest in.

It's not clear how much capital the owners have chipped into the business.

Dean and Stratman are associated with payday lender First Stop Money.