What is Giromatch about?

Giromatch promises its customers “Better Banking Together”. We are a Direct Lending platform and offer our prime retail borrowers a complete digitized loan process at top rates. For investors we offer in this low yield environment a complete new asset class, namely the Deutschlandportfolio. What previously has only been accessible by banks, is now available to everyone – investing into a diversified prime loan portfolio and achieving an attractive return while keeping risks at a manageable level.

What are the three main advantages for investors?

The first great advantage for investors is that they get access to this new asset class at no costs. Secondly, the investment into the Deutschlandportfolio is automatically diversified. This is being achieved by a matching algorithm that optimizes each investment. The third advantage is the security-pool. Giromatch deposits a certain amount of each earned euro into the security pool in order to build up a security cushion for investors.

What are the three main advantages for borrowers?

The advantages for our borrowers result from the digitized loan application process. The loan application can be finished online in less than 10 minutes, no matter if you access Giromatch from home or mobile. A second advantage is the instant loan term confirmation without registration. After one enters all credit relevant facts, we show a customized rate, which we try to stick to as long as the input data was correct. A registration is not necessary in order to get a customized quote. A third advantage is our technology driven approach during the data verification process. A borrower does not need to send us documents proving the credit history. All we need from the borrower is a temporarily login into his/her current account, such that we can instantly confirm the credibility. Nevertheless, we think the most important advantage are the low rates we offer, which is only possible due to our digitized and cost-saving structure.

What ROI can investors expect?

The ROI depends on the portfolio the investor chooses. We provide two different maturities. The shorter-term Deutschlandportfolio runs for three years and has an estimated gross return of 3.60 % p.a. Investors who choose the portfolio with the investment period of five years can expect a gross return of 4.00 % p.a. Due to our strong credit checks we anticipate no more than approximately 1% losses p.a. post recovery due to expected defaults.

How is your company funded?

We were able to inspire several business angels from the financial industry for our seed funding round. Hence, we were able to not only fund the company but also to win many important contacts in the financial industry. Prior to the seed round we invested our own money and money from friends and family. And we were granted an EXIST scholarship by the Bundesministerium für Wirtschaft und Energie (BMWi).

Is the technical platform self-developed?

Yes, it took us around 18 month to develop the platform. Now we are glad, that we have a very flexible, connected and lean Direct Lending platform that is able to react quickly to market changes and changes in the business model.

What was the greatest challenge so far in the course of launching Giromatch?

There were numerous challenges in the past 2 years. One of the hardest was certainly to successfully implement all relevant legal and regulatory requirements. Also, the search for suitable partners, particularly our Service Bank, demanded a lot of patience and negotiation.

How do you see the p2p lending market in Germany compared to the US or UK?

Despite a more competitive market environment compared to the US or the UK, we see a lot of growth potential in the German market. The Schufa statistics of recent years shows that more than 97% of Germans repay their loans properly. This is quite a solid basis for an investment product. In addition, a lot of banks are looking for innovations and ways to reduce their cost. Therefore, cooperating with crowdfunding platforms can be a success factor, as banks gain more flexibility in regards to holding risk assets and are able to reduce costs by outsourcing credit handlings. We also see great potential for SME that want to become more independent from banks in their funding strategies.

I understand you’ll use online marketing and cooperation with local banks to attract borrowers. Can you please explain how the cooperation with the banks will work?

With the launch of Giromatch our first cooperation just started with our service bank. The service of Giromatch is directly available for customers of the Fidor Bank. Secondly, we are talking to banks that currently don’t have instalment loan offerings for their retail clients. For the next development stage, we also think about white label solutions.

Where do you see Giromatch in 3 years?

In the longer run we want to achieve that every person in Germany invests a part of its monetary assets into the Deutschlandportfolio. With our product offering we want to contribute to a more balanced investment approach in Germany. Three years from today we want to be able to issue 100 – 200 loans per day. By then we want to be able to grow organically. Nevertheless, despite all the planning we need to remain flexible as our industry develops rapidly and depends on many factors.

P2P-Banking.com thanks Robin Buschmann for the interview.