Lender Corner with Jesse Tao

Jesse Tao is a Senior Manager at Appboy and a lender on WeFinance. He chats about what he looks for when lending money, breaking the stigma of social lending, and his experience with WeFinance.

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What’s been your experience lending on WeFinance?

I’ve used other P2P lending platforms before — I used Prosper when it first came out — and I found WeFinance simple and straightforward. The social element of seeing how I’m related to the borrowers (whether we’re from the same college, have friends in common, etc.) makes it a lot easier and less stressful. The biggest benefit to this is that you don’t have to worry about credit checks since you’re more concerned with their professional ambitions.

My favorite thing about WeFinance over other platforms is that it felt less like a business transaction but more social.

Do you still use Prosper or Lending Club

I stopped using both platforms awhile back since I found the risk-return profiles advertised weren’t what materialized as a lender.

I realized that if I wanted to stay active in P2P lending, it would require more time and effort to analyze risk using the given financial information on those platforms (whereas on WeFinance, I’m more focused on their stories, ambition, and where they went to school / what program they’re doing).

Do you mostly lend to people you know?

I’ve almost exclusively lent to people I’ve known in real life. It makes the process a lot easier since I’ll have a good sense of their professional history and ambitions.

Since I know them professionally, I don’t have to do due diligence since my network effectively does this for me.

The question shifts from whether I trust this person with money, to whether this helps them achieve their intended goals.

Does it matter what they’re using the money for?

In my experience, it’s typically been for refinancing student loans. In terms of things I look for, interest rate is important given my business/finance background.

During April of the year, I had more than 10 classmates borrowing on WeFinance. I lent to most of them except one. The only reason I was hesitant for him was because he was far away from his goal and I didn’t think my money would help in that situation.

What tips would you give to a borrower making a campaign?

It depends on your goal. If you set a low limit with a high interest rate, you have a greater chance of getting your loan fully funded.

I would say professional photos aren’t that important since I already know you. For potential lenders who don’t know you, this might be important though.

The “about” section is of medium importance. I already know the person so I’ll just skim the blurb to see if there’s anything new or interesting.

For me, recommendations are the most important thing. If someone says they’ve known you for x years and that you’re trustworthy/great financial investment to lend to, it’s like a social guarantor because they’re putting their name and reputation on the line for the person.

Any interesting features you would like to see on our platform?

I think something interesting to explore would be “check boxing” people I’m interested in and having the ability to evenly split $x dollars between them, or a % based off the weighted average.

I think the biggest difficult for WeFinance is breaking down the stigma that keeping work and personal life separate is an advantage. Online dating is an example where they’ve broken this stigma; years ago, online dating was seen negatively but now it’s more accessible. Once people realize that they can get a better interest rate than banks by being social, and that there’s no real cost to being social, more people will take advantage of social lending.