Factors determining profitability and importance of secondary market liquidity for Lending Club


Added on  2019-09-30

5 Pages871 Words166 Views
Case Study

1.Business modelUnder the initial business model, the qualified member is eligible to get the unsecured loans through indirect funding with the specific members of the club. The members can indirectly become the fund specific member by buying the promissory notes issued by the club. The club provides lending facilities through online peer to peer lending in which the club operates. The club is required to obey the lending guidelines according to the countries in which the company operates. Then the company has entered into the arrangement with WebBank in the year 2007. After that, the company is able to provide a beneficial rate of interest to the customers across the operating countries. The loan is segmented into the notes under the current business model. The bank endorses the note the club then the club further provides the note to the members. The loan agreement is made between the bank and borrower then the bank possesses the loan in which the money is managed by the by the bank.Factors to determine the profitability1.Product and servicesThe company is providing beneficial services to the customers in order to satisfy the needs and demand of the customers. The product and services are the main indicators which show that the profit will generate by satisfying the needs of the customers (Lee et al., 2015). 2.Return on loan The return on loan of the company is increasing which indicates the profitability of the company. 3.Financial structureThe structure is very effective which indicates the profitability of the company. 4.Customer satisfactionThe company experience is very high which shows that the company is profitable in the future. 2.

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