That's a very fair question. The primary reason is the underlying population of borrowers is completely different, so your claim that the risks are much higher on WeFinance is not well founded. Collections agencies on services like Lending Club fail to successfully collect a large share of the time, and when they do collect successfully they still charge a large fee. Borrowers on Lending Club are in general higher risk individuals to begin with for a variety of reasons (which led those debts to have much higher original interest than the WeFinance debts, such as large credit card balances). If WeFinance lenders are many times less likely to default than Lending Club lenders, they would be lower risk even if we didn't help resolve defaults at all. (In practice, we're committed to helping lenders and borrowers resolved problems, and that plus the social ties between lenders and borrowers we believe will help lower defaults in the first place and resolve them effectively when defaults do occur.) We've also individually interviewed each borrower and are confident on the identity verification front, and in fact, for friends-of-friends lending, having 20 Facebook friends in common with someone seems like a pretty good verification to me that they are a legitimate person.

Lending club clearly offers higher interest rates. We believe the risks are also much larger and in particular are tough for casual investors to navigate well; this is borne out by the fact that most money invested in Lending Club comes from institutions, not people.

We think WeFinance is a great fit for lenders who like higher simplicity and lower risk, and who get some value out of lending to people they are connected to or who have compelling stories.