The table lists the loan originations of p2p lending marketplaces in February. For many companies it has been a slow month. Funding Circle continues to lead ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 408 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Klear, Viainvest and Bitbond.
Milestones reached this month are:
Funding Circle reaches 2 billion GBP in originations since launch
Fellow Finance crosses 100 million EUR since inception
Geldvoorelkaar hits 100 million EUR since inception
Table: P2P Lending Volumes in February 2017. Source: own research Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations. *Prosper and Lending Club no longer publish origination data for the most recent month.
P2P lending marketplace Finbee has so far offered consumer loans only. Now Finbee is extending the product range to SME loans. Finbee sources the applying companies through a separate website and will focus on small loans up to 15K EUR and a term of 12 months. For most business loans rates will be fixed without an auction (which Finbee uses to set interest rates for consumer loans). Different to consumer loans, investments into business loans will not be covered by the Finbee compensation fund (CSF), if the loan defaults. Each loan application will be individually assessed, by assigning risk grade from A+ to D, where A+ is a low risk loan, D – high risk loan, based on reputation of the management (20% of risk grade), financial sustainability (60% of risk grade), market situation (20% of risk grade).
Audrius Griskevicius, head of SME lending, told P2P-Banking: ‘SMEs in Lithuania have very limited access to financing. As result of this, the government issued a law, allowing p2p lenders to issue loans for small business. Finbee took an active role in development of necessary regulation and we are very proud to be the first one to receive a license of p2p lending to SMEs.’
The first business loan listing is online. Magava wants to borrow 10K EUR working capital for 12 months at 15% interest rate. Investors have to complete a self assessment survey before they can invest into business loans.
VIAINVEST is a peer-to-peer lending marketplace offering both private individuals and companies to invest in consumer loans originated across Europe. VIAINVEST follows worldwide trend and offers investors safe and more effective investment opportunities than traditional banks do. The main aim of VIAINVEST is to ensure outstanding investor support as well as provide easy and accessible investment environment that does not require useless actions or extra time for understanding ongoing processes.
What are the three main advantages for investors?
VIAINVEST is a truly customer-oriented company, and we strive to provide the most satisfying investing experience possible. Great deal of investors’ concerns are related to investment safety, so all loans listed on VIAINVEST are secured with a Buyback Guarantee. Also, to guarantee that one investor will never be 100% committed to particular loan, originators keep 5% “skin in the game†for each loan.
To develop the platform that would be convenient and easy to use, we encourage investors to leave their feedback; each of recommendations is reviewed and most of them are included in our future updates list.
What ROI can investors expect?
Currently investors can choose to invest in loans originated in the Czech Republic with 12% annual ROI and Spain – up to 12,2% annual ROI depending on the loan.
VIAINVEST was founded by the mother company VIA SMS Group. Can you please describe what VIA SMS Group does and why it decided to set up the VIAINVEST marketplace?
The launch of VIAINVEST was great refresh for VIA SMS Group that is alternative finance services provider operating across Europe. Until now VIA SMS Group was mainly operating in consumer lending market but with VIAINVEST the company is making a shift from non-bank lender to a fintech company. Currently VIA SMS Group is offering its services in 5 countries – Latvia, Sweden, Poland, Czech Republic, Spain – and has recently launched several new products to diversify its product portfolio. From the end of 2016 the company is also offering payment card with credit line SAVA.card, savings product VIASPAR for Swedish clients as well as there is still an opportunity to invest into company’s bonds. The company has great development plans, but outstanding customer care will always remain the most important goal.
VIA SMS Group is active in more countries than in Spain and the Czech Republic. Will loans from other countries be listed on the VIAINVEST marketplace soon?
This is actually the next update planned for VIAINVEST – in following weeks we will publish loans originated in Poland and Latvia, Sweden will also follow in the nearest future.
Is the technical platform self-developed?
Yes, we have built VIAINVEST from scratch. As we prefer to have full control over all processes, we have great team of IT professionals employed in house to ensure continuous support at any time.
What was the greatest challenge so far in the course of launching VIAINVEST?
As VIAINVEST is not the first platform entering the peer-to-peer lending market, we had a lot of examples to learn from. I can say that there were no critical problems within the development process, adjusting VIAINVEST to the specific needs of investors on the go is more challenging!
Which marketing channels do you use to attract investors?
We mainly use digital marketing, but reaching out to the fintech influencers and opinion leaders is more effective tool to spread a word about VIAINVEST. As clients of peer-to-peer lending platforms are specific group of people with certain interests and goals, you need to be more creative and intelligent within any advertising activities.
Is VIAINVEST open to international investors?
VIAINVEST is open to any investors holding a bank account within the European Union or other country to which the requirements arising from European Union legislation on the prevention of money laundering and terrorism financing apply. Currently there is no legislation in Latvia regulating operations of peer-to-peer lending platforms, but it may be developed in 2017, so VIAINVEST is already implementing existing regulations.
Where do you see VIAINVEST in 3 years?
Fintech is changing traditional finance world in such pace, that it is hard to predict what will happen even in a year. VIAINVEST will definitely continue to expand its loan originator list and implement new features to make online investing mush easier and accessible to everyone. We have great plans, first news will be out soon, stay tuned!
P2P-Banking.com thanks Eduards Lapkovskis for the interview.
Iuvo is the first South-East European P2P platform that allows its users to buy parts of loans. All loans listed on the platform are issued by originators (registered non-banking financial institutions). We give our users the opportunity to generate an annual return up to 12% on their investments while simultaneously provide our originators with the chance to develop their businesses.
What are the three main advantages for investors?
The most obvious advantages are the high ROI and the buyback guarantee all listed credits have.
Major plus is the reliable originators we have. They go through extensive audits before joining the platform and are required to keep a minimum of 30% of their portfolio – so-called “skin in the gameâ€. Our “skin in the game†requirement is the highest on the P2P market and it is there to better align the interests of the originators with those of our investors.
I might add another serious advantage – we have the biggest and most experienced Bulgarian originator with very clear and refined scoring and lending procedures and more than 10 years experience on the market.
What are the three main advantages for borrowers?
Iuvo is a peer-to-peer marketplace. We don’t lend.
What ROI can investors expect?
The expected annual return depends heavily on the choices our investors make, but the return a well-balanced portfolio should make is on average between 7 and 12%.
Is the technical platform self-developed?
Yes, the platform is entirely self-developed and we continue to improve it every day.
How reliable is the credit rating / credit history data available for the Bulgarian loans?
Bulgaria has a very well developed non-banking financial sector and a great deal of experience with consumer loans. The quality of the scoring process is without a doubt on a very high level and there are no reasons to think that would change any time soon. Of course, as I’ve already said, thorough audits are made before we consider any originator joining us.
How is the company financed? Why did you select to start the company in Estonia?
Iuvo is financed through business angels. We chose Estonia as it has been the cradle of P2P lending in the past years and we believe the best way for us to grow and develop is to be where the best platforms are.
What was the greatest challenge so far in the course of launching Iuvo Group?
The greatest challenge we’ve had so far was to educate an audience that has never heard of P2P lending/investing. We’ve worked really hard on gaining awareness and building trust and I’m proud to say we succeeded. The next great challenge we look forward to is providing a user experience that stands out amongst all other platforms.
Which marketing channels do you use to attract investors and borrowers?
We mainly use internet – all the different ad formats and approaches it provides. I find that participating in different forums and events helps tremendously to shorten the distance between us and our investors and I personally believe that the right communication is a mix between technology and personal contact.
Is Iuvo Group open to international investors?
In order to open an account with us individual investors must be at least 18 years old, have a bank account in the European Union (or third countries that are currently considered as having equivalent AML/CFT systems to the EU), and have their identity successfully verified by Iuvo’s back office team.
Where do you see Iuvo Group in 3 years?
I see us as one of the leaders on European P2P lending market. I strongly believe that the potential P2P lending has is yet to be fully achieved and that the industry will surprise us even more with its growth and possibilities. We most definitely will be a part of that.
Lenndy is the first lending marketplace in Lithuania that connects loan originators with individual and institutional investors. At Lenndy, investors can invest in asset-backed loans and get a 12-15% return.
What are the three main advantages for investors?
Loans are secured by buyback guarantee and collateral as well as personal guarantees.
12-15% annual return.
No investment amount limits and no platform fees for investors;
What are the three main advantages for loan originators?
Easy and transparent opportunity to obtain working capital by selling part of their existing loan contracts to investors (like Mintos).
Advanced IT integration with credit management systems capabilities.
Ability to grow reputation and brand awareness internationally.
What ROI can investors expect?
Currently, investors at Lenndy earn 12.53% average annual interest. Earnings usually depend on investment strategy and risk awareness. That is, when investors chooses to invest only in loans secured with buyback guarantee and collateral, they can expect to earn around 12% return. When investors seek 13-15 % annual return, they should consider adding invoice financing and business loans to their portfolio.
Is the technical platform self-developed?
Lenndy IT system is self-developed from scratch. IT development company was hired to complement in-house developers. It is very dynamic in order to react to market changes, adapt to multiple financing models and investors’ needs and comply with all legal requirements.
How reliable is the credit rating / credit history data available?
Loan originators collect information about borrowers from reliable credit agencies as well as public registers. We do not use standardized credit rating yet but we already have a developed model for it that will be introduced in the near future.
How is the company financed?
Company was founded in late 2015 and secured seed investment from an angel investor. Currently, Lenndy is negotiating with several angel investors and venture capital companies for another financing round that will be used to expansion and further product development.
What was the greatest challenge so far in the course of launching Lenndy?
Our goal was to create an investment instrument that would be attractive to investors, which would be liquid and would supplement any investment portfolio for great diversification. Loans market is massive, but only a fraction of it was available for investors. We know we have a great tool and we are looking forward to reaching individual and institutional investors across the whole Europe and beyond.
What is the current state of regulation in Lithuania?
Parliament of the Republic of Lithuania passed the Law on Crowdfunding, which was created by the Bank of Lithuania and the Ministry of Finance. The Law also describes Lending Marketplace as a crowdfunding model and Lenndy had already started the procedures of involvement in a list of crowdfunding operators.
Which marketing channels do you use to attract investors and borrowers?
Lenndy uses gentle digital marketing to attract investors from Europe and already has about 1000 investors who funded around 90 loans. Lenndy is growing very fast, even though we do not engage in heavy marketing. We believe it is a result of trustful model and word-of-mouth marketing. The word is spreading quickly in Lithuania, therefore we are preparing for international growth.
Is Lenndy open to international investors?
Yes, Lenndy rolled out English language and we have already started working on German and other languages.
Where do you see Lenndy in 3 years?
Lenndy has a target of at least 10 loan originators across Europe to improve portfolio diversification for our investors. In the following years we are planning to introduce portfolio buyout functionality which would allow investors sell their whole portfolio at once, secondary loans market where investors could buy and sell individual loan claim rights and many other features. We see Lenndy as transparent, innovative and trustworthy international lending marketplace.
The following table lists the loan originations of p2p lending marketplaces in January. Funding Circle leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 476 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms.
Zopa celebrated passing 2 billion pounds in loans lent since launch. That figure means 300,000 loans to 246,000 borrowers funded by around 75,000 lenders. Jaidev Janardana, Zopa’s CEO, commented: “We’re excited to be the first UK peer-to-peer lender to pass the 2 billion GBP milestone. Over the last 12 years, we’re proud to say we’ve helped a third of a million people get better interest rates for both borrowing and lending. The 2 billion GBP milestone demonstrates how far we have come, but our journey is only just getting started. Our decision to launch a next generation bank reflects our mission to create better options for consumers and to shape the future of finance.â€
Further milestones reached this month were:
Harmoney passes 500 million NZD since inception
Assetz Capital passes 200 million GBP since inception
Table: P2P Lending Volumes in January 2017. Source: own research Note that volumes have been converted from local currency to Euro for the sake of comparison. Some figures are estimates/approximations. *Prosper and Lending Club no longer publish origination data for the most recent month.
