Smava

Exclusive Interview: Smava expands p2p lending to Poland

wiseclerk 2 Comments

Starting Jan. 7th, the German p2p lending service Smava will launch it’s p2p lending platform in Poland. I interviewed Smava CEO Alexander Artopé.

The following interview was originally conducted in German language. Possible translation errors are mine.

P2P-Blanking.com: Mr. Artopé, why has Smava chosen Poland as target market for the international expansion?

Smava: For several reasons. Poland is a fast growing economy with approx. 40 million residents. In Poland the span between deposit rate and base rate is very high – approx. 15 percent. Therefore the smava marketplace will be very attractive for polish customers right from the beginning. And regulation in Poland does not require a bank for the p2p lending model. This keeps transaction costs very low.

P2P-Banking.com: There are already 3 p2p lending services established in Poland. How does  Smava plan to win market share as newcomer?

Smava: Compared to the active services smava is much more secure. Like in Germany it is a central product feature, that the risk for the lenders is transparently evaluated and can be factored into the calculation . To achieve this we cooperate with the polish credit rating agency (BIK).

P2P-Banking.com: How did you organize the operations? Does Smava have a branch or a subsidiary in Poland? Or do you operate from Berlin?

Smava: We have a subsidiary in Wroclaw, Poland, with a polish management team.

P2P-Banking.com: Where are the biggest challenges in international expansion: technical, legal/regulatory, marketing or recruiting team members?

Smava: On all fields, in the following order: legal/regulatory, recruiting and then marketing.

P2P-Banking.com: Which differences does the polish version of Smava have compared to the german Smava version?

Smava: Firstly we will start in Poland without the ‘Anleger-Pools’ (P2P-Banking: an insurance feature), because p2p loans are mostly short term there. Secondly all loan contracts will be directly between lenders and borrowers  – not like in Germany with the biw bank as intermediary.

P2P-Banking.com: What will be the maximum loan amount that can be borrowed at Smava Poland?

Smava: A polish borrower can use smava.pl for loans up to 100,000 Zloty. Each lender can invest up to a maximum of 200,000 Zloty. (P2P-Banking.com: 100,000 Zloty equal approx.  34,000 US$)

P2P-Banking.com: Which credit rating information will Smava.pl supply for the lenders?

Smava: Like in Germany smava will supply a credit score (BIK) as well as a debt/income ratio.

P2P-Banking.com: Which fee structure does Smava.pl have?

Smava: Lenders can invest fee-free, borrowers pay 1%  of the loan amount. Continue reading →

Review of peer to peer lending developments in 2008

wiseclerk 3 Comments

As the end of 2008 approaches here is a look back on the highlights of peer to peer lending news in 2008:

Smava raises 4 million Euro in second VC round

wiseclerk 2 Comments

Smava logoSmava.de, offering p2p lending in Germany, today successfully closed it’s second VC round. Earlybird and Neuhaus Partners invested 4 million Euro (approx 5.5 million US$). Earlybird did already invest 4 million Euro in Smava in the first round. Smava CEO Alexander Artopé announced that Smava will use the money for product development, marketing and internationalization.

Smava funded a loan volume of 535,000 Euro in September generating revenues (1percent origination fee) of 5,350 Euro plus an undisclosed amount (my estimate:<1,000 Euro) in commissions for insurance products.

The growth of the funded volumes per month can be seen in this chart.

Demand at Boober NL slows

wiseclerk

Demand at Boober.nl is slowing. When I checked today only two loan listings were open. The following curve showing unique loan requests definitly shapes in the wrong direction. Boober lenders discus this development in this forum thread.


(Source Booberwatch.nl)

Since the launch 15 months ago, about 2.4 million Euro (about 3.8M US$) loan volume has been funded through Boober.

German Smava.de has funded about the same volume (2.3 million Euro) but after a slower start 14 months ago, lately the volume growth accelerated moderately.

Smava loan volume
(Smava loan volume, Source: Smava loan stats at Wiseclerk.com).

On Smava as well as on Boober average borrower interest rates have risen considerably since the start. This reduces the attractiveness for borrowers.

New at Smava – business loans, larger amounts, longer terms

wiseclerk

German p2p lending service Smava.de made some changes:

  • Borrowing for business purposes is now allowed. The borrower still is an individual person but is no longer limited on private purposes of the loan
  • Borrowers may borrow up to 25,000 Euro (approx 39,200 US$), previously the maximum was 10,000 Euro
  • Maximum amount any lender can invest in the marketplace is raised to 100,000 Euro (previously 25,000 Euro)
  • Loan terms are now selectable 36 or 60 months (previously only 36 months); the insurance pools (Anleger-Pools) are seperated by credit grade and term. This complicated construct will influence lenders when deciding to bid on loans that are otherwise comparable but differ in loan term, since the level reached in the insurance pools directly impacts each payment rate.
  • Bad debt sales rates have been lowered for lower credit grades (previously it was 22.5% to 25%, now it is 15% to 25% depending on credit grade)

(Source: P2P-Kredite.com)

Since it's launch in February 2007 Smava has funded 457 loans with 2 million Euro (approx 3.14 million US$) loan volume. 8 loans have defaulted and currently 9 loans are late.