Mr. Peter O'Mahony:

The Deputy's first question was on the terms of loans. All of our loans are three years in duration and are fully amortised, which means 36 equal repayments with every repayment having interest and capital added. The difference between our loan and that of a bank is that there are absolutely no penalties for early settlement. Therefore, if a business decides that it does not need a loan any more because there is a cheaper alternative, or for whatever reason, all it must do is pay back the outstanding capital. There are no penalties for settling early. That is important in order to give a business a bit of flexibility.

The Deputy's second question was whether SMEs know about the service. When we launched last March, if we were in a room that contained 100 people we would have felt that fewer than ten of those people would have heard of crowdfunding or peer-to-peer lending. The situation is different now. Last week we made a presentation to the Tralee Chamber of Commerce with 150 people present, and I feel that more than 50% of those present would have heard of crowdfunding, participated in some type of crowdfunding, watched something about it on television or seen it in the press. Crowdfunding is becoming more known in the sector. We spend a lot of time trying to inform people and we meet representatives of chambers of commerce, SMEs, ISME, the Small Firms Association and their memberships. I have planned the business since 2010 and everybody I met on the run-up to its launch said I would find it very hard to get people to lend through the site because nobody trusts the systems any more, but that there would be a very lengthy queue of borrowers down the road vying to borrow. Sadly, we do not have a huge queue of borrowers, because most SMEs have got used to surviving without capital, which is not a good thing. Instead, they are using personal resources such as credit cards, extending their credit terms with suppliers and that type of thing. That is what is being used for cashflow. The biggest message that is difficult to get out is that an organisation will not have to wait eight or 11 weeks for a decision; we will make a decision in two or three working days. That is the biggest barrier we have come across in the marketplace - that businesses have become resigned to the fact that capital is not available.

With regard to the volume of loans, when we first started in March we provided one loan every two weeks of about €30,000 or thereabouts. Last week we did three loans and we hope to do four loans this week, which means we are very close to providing a loan a day. As a business model, a loan a day can very easily become two or five loans a day. We are very happy that we are on target for where we wanted to be.

On the lenders side, everybody told us it would be difficult to get lenders' money. Since day one we have had a huge surplus of lenders' funds. We have no issue with being able to fund businesses. Today and every day we have hundreds of thousands of euro in excess funds available and ready to lend but we have strict criteria for people to come on the platform. However, we are not getting enough borrowers through the system at the moment.

On the demand and supply side, we would have seen this as a business with two sides in that we needed to attract lenders and borrowers. We had in mind that our marketing budget would be divided down the middle; 50% for each. We have spent hardly any money on acquiring lenders. All our efforts and focus has been on the borrower side, which most people would find surprising.

On the regulation aspect, we have been working with the Peer2Peer Finance Association in the United Kingdom and we were involved in drawing up the White Paper it has in place. Regulation will come into play from 1 April this year in the United Kingdom in a soft and light way, so to speak, with a view that a year later it will have settled down and all the criteria will be in place. We believe regulation is a good idea because it would give our lenders and our borrowers a little more comfort but we would be concerned that if the regulation was too tough, it might slow down the progress of businesses such as ours being able to get out to the market and bring many borrowers on board.

Regarding our observation in the market, since we have launched everybody, without question, is very positive about this as a business model, how it can work and all the transparency. Anyone who has ever been on our site can see everything about every bid, every loan, and the interest rates people are getting. It is important that there is some control in the business. We would want to make sure that a rogue trader did not come on the market in the future and unsettle it because once that element of trust disappears, it would become a very hard business for everybody.

Regulation will be important and it is the reason the platforms in the UK have pushed for it. Somebody described the model that would probably work best as being similar to the airline type model where the sites were bonded, which meant each site had to put €100,000 or €50,000 as a bond to show they were of good character and also to protect lenders on the other side, but that is not what is happening in the UK. It is that the UK Government will regulate them as if they were payment platforms rather than financial institutions.