estonia

P2P Lending Service Investly Launched Today

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P2P lending service Investly launched today offering business loans to companies financed by both private and institutional investors. All investment opportunities offered have undergone a thorough pre-screening process including business plan validation, financial analysis as well as credit evaluation.

Once the requested loan amount is filled Investly uses an reverse auction with investors underbidding each other and lowering the interest rate for the business until the auction ends.

The first investment opportunity Investly has live is the chance to lend to Sepapaja OÃœ, a blacksmith who is planning to use the investment to scale up up their business by purchasing a larger pneumatic hammer, lathe and various other tools. According to Stig Paju, the manager of Sepapaja OÃœ, they decided to use the service because: ‘by using Investly we are able to enhance our production, widen our product portfolio and serve more clients. As a positive by-product, our investors will help us to spread the word and gain even more customers.’. The interest rate offered is 15% p.a., but may sink if investor demand is higher than the loan amount. The loan is rated credit grade A by Investly.

Investly is open to international investors from the European Union and Switzerland. I was able to test-drive the platform during the just ended closed alpha. Transfering money in via a SEPA transfer and bidding was fast and easy.

To accelerate the development of the service, Investly will be participating in the BusinessTech accelerator run by Startup Wise Guys – a technology accelerator with a global reach based in Tallinn, Estonia. Investly was chosen from among 150 applicants to part-take in the program alongside 10 other teams from all over the world. Over the next 3 months, they will go through an intensive mentoring, service development and marketing process; ending with investor days both in Tallinn, Estonia and London.

Siim Maivel, CEO of Investly told P2P-Banking.com:  ‘Building on the launch in Estonia, we have ambitious expansion plans with preparations under way to enter new markets, with the UK to follow later in the year.’.

P2P Lending Site Isepankur Improves Loan Quality

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Estonian p2p lending service isePankur successfully improved the loan quality in 2010. The company added several validation steps for loan applications. On top of the existing credit bureau checks and it’s own scoring model isePankur introduced several manual checks on the borrowers in May and July. Since September borrowers need to submit bank statements which isePankur uses to verify information presented in the loan application. The measures implemented are listed in detail here.

CEO Pärtel Tomberg told P2P-Banking.com: “…  these [new] loans will … be the most profitable social banking loans for investors across the globe”.

To prove this claim Isepankur is publishing real time performance data on its marketplace.


(See Isepankur site for larger size interactive charts)

‘Unlike other companies you can see the quality of loans per month so the growth rate of the portfolio will not hide the actual returns from loans issued previously.‘ says Pärtel Tomberg.

The charts reflect the drastic reduction of bad debt from loans issued after May 2010 and the very positive impact on lender returns. Continue reading →

B2B Loans Introduced at Isepankur

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IsePankur, the Estonian P2P banking site, this recently added three innovations to their platform:

  1. Loan auctions that end immediately when the loan request is 100 percent funded
  2. Business accounts enabling Business-to-Business, Consumer-to-Business and Business-to-Consumer lending and borrowing
  3. An arbitrage court that will be in charge of solving disagreements coming from the loans, incl. defaulting loans

isePankur decided to add a new auction type based on requests from the borrowers that allows the borrower to choose if the auctions ends after a set time period or when its fulfilled 100 per cent. The borrowers currently have an alternative to borrow from banks, pay-day loan companies or isePankur. The two former institutions provide the loan to the customer with-in 1 to 3 days from the application. Hence some of customers asked to implement a system by which they would be able to choose between a quick financing or a low interest rate in order for them to be more willing to use the peer-to-peer platform.

isePankur also launched an important new feature allowing legal entities to register, lend and borrow on the site. The maximum loan amounts (only for companies) have been increased to 150,000 EEK (approx. 13,175 US$), approx 15 times higher than the loan limit for individuals. There were three major reasons for the addition: (a) small companies lack financing opportunities as the banks have stopped providing credit whilst there are no official debt markets in Estonia; (b) companies with excess funds do not have simple investment opportunities that would provide them with returns of over 3-4 per cent per annum; and (c) there is a 0 per cent corporate tax in Estonia hence most of individuals with excess capital keep it in their companies’ accounts. isePankur aims to increase the loan volumes on the site multi-fold after the public and companies have had enough time to get familiar with the benefits provided by the business services.

Continue reading →

Sobralaen renamed Isepankur

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Only 6 weeks after the launch, Estonian p2p lending service Sobralaen.ee was renamed into IsePankur.ee (translates to iBanker). The reasons were that “The previous name only represented one side of the business (borrowing) and [that] it had negative associations with payday loan companies who have destroyed the term ‘loan’ in Estonia over the past 2-3 years”, co-founder Pärtel Tomberg told P2P-Banking.com.

Since the launch 44 loans with a value of 81,200 EEK (approx. 7,000 US$) were founded. The current average interest rate is 25.3% which matches bank interest rates for similar loans.

Following requests by lenders, Isepankur allows borrowers to reveal their identity (full name and personal identity code) in their auctions. Clicking on the name or the identity code runs an automatic query at Google.

Sobralaen brings p2p lending to Estonia

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Today Sobralaen.ee, the first Estonian p2p lending service, has launched.

Sõbralaen’s borrowers fill in a loan application for up to 15,000 EEK (approx. 1,200 US$), specify the loan length (up to 2 years), maximum interest rate and sign the loan application. This application will start an auction, during which Sõbralaen’s investors can bid for the right to invest in that loan. When making a bid, Sõbralaen’s investors specify how much they are willing to invest and how high interest rate they are looking to earn. The investment amount can be between 100 and 15,000 EEK. Before making the investment, the investors can see the borrower’s credit score, history of previous Sõbralaen transactions and also personal details. Investors also have the possibility to ask various questions from the borrower. In the end of the auction, the system will automatically pick the best bids and combine them into one loan. Sõbralaen’s system will thereafter manage the rest of the loan process from the payment of loan to debt collection.

Estonians are fast in adapting new internet technologies. This is reflected in the process of Sobralaen’s sign-up, too. Users identification is done at the moment of sign-up electronically. This is possible, because users can only sign up using a government issued ID-card (currently 80% of Estonians had an active ID card – but only 20% make use of its functionalities so far) and a smart card reader or Mobile-ID. Furthermore banking transactions and court documents are signed with digital signatures.

Sobralaen was founded by Pärtel Tomberg, Mikhel Tasa and Martin Rask.
I was invited to test-drive the platform in summer 2008 while it was still under development. The usability was good and I liked the detailed FAQs that explained everything to the point.

Continue reading →