cross market lending

BLender Begins International Expansion and Offers Cross-Border Peer-to-Peer Lending

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Blender LogoBLender, a p2p lending company from Israel, today announced its global expansion, beginning with new offices in Milan, Italy and Vilnius, Lithuania that will serve customers in Italy and the Baltics. The Israeli-based company delivers a P2P lending platform with a proprietary consumer credit rating system designed for territories without credit bureaus or traditional consumer credit information. BLender is a cloud-based platform that was built to work in a wide range of markets and languages.

In Italy the platform charges borrowers a 4.5% origination fee and investors 1.5% of each repayment (principal and repayment). Compared to other marketplaces these fees are in the higher price range. The fee for selling a loan on the secondary market is 0.45%.

BLender has experienced exponential growth since its launch in 2014 and has already provided approximately 12 million USD in loans. The company will continue expanding its global operations into territories that are craving consumer credit. In 2017, BLender plans to launch operations in Africa, Latin America and other European Union (EU) countries.

“Offering multi-national P2P lending has been our vision since BLender’s establishment,” said Dr. Gal Aviv, CEO, BLender. “Since our Israeli launch in 2014, we have built the foundation, infrastructure and technology to enable BLender to operate in the global market, so we will be able to face operating, cultural, technological, regulatory and taxation challenges.”

With the expansion into Italy and the Baltics, BLender is enabling users to lend and/or borrow across countries, making financial borders a thing of a the past, says the service.

“BLender identified a credit gap in countries where the supply of consumer credit is insufficient for the populations’ needs and is priced very high, and a gap in other countries where the savings options have very low or even negative yield,” said David Blumberg, founder and managing partner, Blumberg Capital, a San Francisco-based venture capital firm that led BLender’s last funding round. “BLender’s multi-national lending options mediate this credit gap by creating a meeting ground between borrowers from countries that lack consumer credit, to lenders from countries where the yield on their savings in insufficient. We support and strongly believe in the vision, management capabilities and business potential of the BLender team.”

Investors on the BLender platform will earn predicted interest rates of 5-6% annually. The safeguard fund acts as an additional layer of protection to the lenders in case of a default. BLender’s default rate is approximately 1% before activating the safeguard fund. Thanks to the SafeGuard fund, the effective default rate is 0% says the service. BLender also offers ReBlendTM, BLender’s secondary market that offers the lenders the option the trade their loan portfolios and enjoy liquidity.

Recently BLender was chosen to participate in the exclusive ELITE program of the UK Stock Exchange that finds and nurtures companies with the potential for an IPO. As part of the program, BLender receives the guidance of the program’s experts for two years that help promote the company’s activity.

Furthermore, the company was selected as one of the most promising Fin-Tech companies in the world for 2015 by the accounting firm – KPMG, and also by the United Kingdom Trade and Investment Department.

The multi-national expansion was done in collaboration with KPMG.

BLender's founders
BLender’s founders

Lendico Makes First Spanish Loans Available on German Marketplace

wiseclerk

Today p2p lending service Lendico made the first loans from Spanish borrowers available to German investors on the German marketplace. German lenders can now bid on these loans provided they fulfill a few prerequisites. To prepare for this, Lendico had in the past weeks informed interested investors of the necessary steps to enable bidding on these cross-border loans on the German marketplace:

  • Lenders need to upgrade to a (free) premium account, if they don’t already have one.
  • Lenders need to send a form via postal mail to the tax authorities that certifies the status of residency. Lendico advices that it will usually take the tax authorities 5-21 days to process this confirmation.
  • The returned postal form can then be submitted via post, fax or email (scan) to Lendico.

The origin of the listed loans is now marked by a flag symbol on the German marketplace (see below).


Excerpt of a screenshot of Lendico.de showing listed German and Spanish p2p loans

This does not work (yet?) for loans from the other Lendico markets.

Isepankur Rebrands As Bondora – Raised 1.3M

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P2P Lending marketplace Isepankur yesterday rebranded as Bondora. Bondora is active for borrowers in Estonia, Spain, Finland and Slovakia and lenders in 29 countries across Europe (all European Union countries plus Switzerland).

Following a new 1.3M Euro round of financing raised for the company, Bondora welcomes a new board to help the company in delivering an innovative business idea across the borders.

Mark Noetzold (a member of various supervisory boards and a lecturer for risk management in Germany, Switzerland and Austria), João P. S. Monteiro (an international manager responsible for global development at a blue-chip company) and Mati Otsmaa (a C-level management executive with extensive experience in consumer credit lending at American Express, Barclays, Citibank, Chase, Experian and HSBC) join forces to improve, market and raise awareness for the first cross-border peer-lending platform Bondora.

„Direct or p2p lending is the most rapidly developing financial service today and has a huge future potential by offering the best solutions to the borrowers and high returns for the lenders. I believe that Bondora, with its cross-border strategy, strong team and the ability to execute fast, has the potential to change the world of finance to be more transparent and straightforward,” – commented João P. S. Monteiro, board member and one of the angel investors.

According to an article in E24 Postimees the new investors now hold about 19% to 20% of the company shares.

„Over the last 5 years we have brought together over 70,000 customers from 29 countries to borrow and lend on our platform. The newly raised capital will be used to improve, market and raise awareness of our service further. Today we have a product, where a telephone engineer from Estonia could get funds to renovate his flat from a dozen of lenders located in any European country. Not only our borrowers get a chance to have their loans financed, but they get the best available deal on the marketplace. A secretary from Slovakia, for example, ready to pay 28% for a 600 Euro loan to study English, might end up paying only 12% because lenders pile in.  It is a simple and secure application process for the borrowers and a possibility to diversify private investment for the lenders. At the moment 26% of our lenders come from Germany, 11% from the UK and 4% from Switzerland (with the rest being spread across Europe). With the rapid growth of the company in the last year, the old name could no longer accommodate room for our cross-border growth, that is why today we are also launching our new name – Bondora, and our website available in 23 languages,” – commented the CEO of Bondora, Pärtel Tomberg. Continue reading →

A Visit with Lendico

wiseclerk

Last week I flew to Berlin to visit Lendico and met the management. Lendico is the third entrant in the German p2p lending space and launched in December 2013. The fact that they are financed by Rocket Internet, the venture capital arm of the Samwer brothers, attracted additional attention to their launch.

International Expansion

A major topic in our conversation was the known plan of Lendico to offer the p2p lending service in multiple European countries. While Lendico would disclose neither which countries they target next nor details on the timeline they stated that additional countries will be live within the next 6 months. Lendico will manage major functions centrally from the Berlin office and use national offices for some functions of operations.

I learned that Lendico will allow cross-border lending like Isepankur, meaning a German lender that registered could not lend only to German borrowers but also to borrowers resident in any market that Lendico opens to.
Challenging issues to be dealt with are multiple currencies and different credit rating systems in different countries. For the later Lendico aims to simplifiy this for lenders by translating ratings in Lendico score classes A to E that will be used in all markets.

Prompted by my question Lendico CEO Dominik Steinkühler said that in the long run there is a high propability that there will be one large European p2p lending market rather than many fragmented national ones.

Competition

Currently Lendico sees Auxmoney as main competitor. Asked whether he expects the fast growing UK p2p lending services to expand internationally Steinkühler told me that he sees no signs for this as these players seem quite satisfied with growing in the UK market. Continue reading →

P2P Lending Service Isepankur Opens To Borrowers In Finland

wiseclerk

Estonian p2p lending service Isepankur announced today that it now offers p2p loans to borrowers from Finland. Isepankur already opened to lenders from multiple markets last year. Now Isepankur adds Finland as the first foreign market executing the expansion strategy on the borrower side.

Here is an excerpt of the announcement made today:

Dear customer,

We have taken the next step towards building a pan-European credit platform so you could continue enjoying a great return on your money. We have now also started accepting loan applications from Finnish residents side-by-side with existing Estonian borrowers. We will offer one of the best rates in the market whilst trying to deliver a great return to our international and local investors all in one single platform.

Finnish market offers an opportunity to diversify your portfolio and better manager your returns. Here are some key facts about Finland which you might not have known:

Population: 5.4 million; 67% live in towns or urban areas, 33% in rural areas
Monthly wages: average 3,040 €; men 3,352 €, women 2,735 € (2010)
Internet users: 85,3% of the population internet (ITU, June,2010)
A number of payday loan providers has grown rapidly in recent years pushing up the interest rates up to 50% per annum. Lack of competition in the consumer lending and banking market means that even low risk customers typically pay above 20% per annum.
Situated: Northern Europe, neighbouring Sweden, Norway, Estonia and Russia

…

We believe that there is a big potential for isePankur on the Finnish market as most of the competition consists of unethical and unsustainable loan providers. We are sure that investors will find new attractive investments opportunities with solid returns. Please be aware that it might take a couple of weeks for the Finnish investment opportunities to appear on the market. We will soon also allow you to add market-specific configurations to your investment profiles.

…

Isepankur Launches International Peer To Peer Lending

wiseclerk

The Estonian p2p lending service Isepankur recently opened up to international lenders. Anyone with a bank account in the European Union or Switzerland can now start lending at Isepankur. Borrowing is still restricted to residents and businesses in Estonia (due to regulation reasons). I expected cross-border lending to be happening in peer to peer lending as early as 2008 (see my predictions). As it turned out it took 4 more years since my blog post for cross border lending to happen.

Isepankur is in operation since 2009 and has a good performance track record since.


Screenshot from the statistics section. The realised returns (after bad debt) show that most of those investors, who lent more than 5,000 Euro, fall into the range of 10 to 20% p.a.

Advantages and disadvantages for (international) lenders:

  • no lender fees
  • higher interest rate level in Estonia (compared to other European markets)
  • fast money transfer (SEPA bank transfers usually take only one working day and do not cost more than national transfers) – therefore getting money in and out is fast
  • lots of information about the borrowers (employment&income verification, information on other existing debts of borrower)
  • low bad debt in relation to interest rates
  • low minimum bid allows wide diversification
  • stringent debt recovery process
  • detailed statistics (>2 years track record) and account performance overview
  • high security standards
  • not that many loan listings. It takes lenders some time to built a large portfolio

Advantages and disadvantages for borrowers:

  • application can be completed totally online (no paperwork, borrowers even submit bank account records digitally)
  • moderate fees
  • fast funding with short auction duration; money accessible within two hours of auction (successfully) closing
  • currently the interest level is very high; this might get better if Isepankur succeeds in getting more lenders

I will publish an in depth review article showing step by step how I tested investing at Isepankur. Look out for this article containing screenshots showing the features and interface in the next days on this blog.