interview

Interview with Patrick de Nonneville, COO of Lendix

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What is Lendix about?

Lendix is an online marketplace for business loans, enabling investors to lend directly to prime small and medium sized enterprises. We started operating in France, making our first loans in April 2015. We’ve made 1.5M EUR of loans in our first month, and are on track for a similar number in May.We lend from 30,000 EUR to 1,000,000 EUR for 18 to 60 months with rates varying from 4% to 9%.

What are the three main advantages for investors?

We offer access to a largely untapped and high quality market, with low defaults and low prepayments. We have the same information as the banks via our Banque de France database membership. Last but not least, we charge no fees to lenders.

Patrick de NonnevilleWhat are the three main advantages for borrowers?

We’re fast, easy and transparent:

– we make offers in 7 business days and our docs are written in plain French

– we guarantee the funding of all the loans we put on the platform

– we require no personal guarantees from the company directors

What ROI can investors expect?

5.5% to 6%.

How did you start Lendix? Is the company funded with venture capital?

Lendix was founded by Olivier Goy in Q3 2014.

France was one of the first countries to lift the legal uncertainties around crowdlending and we saw an opportunity to plug the funding gap that micro and small businesses suffer from. There is a vast amount of capital available to lend, but small businesses find that dealing with banks has become so painful and distracting that they effectively don’t even start the process. Our aim is to surprise borrowers with how painless it is to get a loan.

The company’s shareholders (apart from its leadership) includes a VC, Partech Ventures. Olivier has a long standing relationship with Partech, having worked there himself, and having had Partech has one of the shareholders of the Private Equity company he founded in 2001.

We also have a bank, an asset manager, a family office and a large corporate amongst our backers.

An important point is that Olivier, myself and the other main shareholders of Lendix have skin in the game: we have committed money to our institutional vehicle and lend to every company that comes on the platform, under the same conditions as all the other lenders. Continue reading →

Interview with Koen The, CFO of Lendahand

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What is Lendahand about?

Lendahand is a Netherlands-based online lending platform with the objective to stimulate employment in emerging countries. Small and Medium Enterprises (SMEs) in these countries do not have proper access to financing as they are too small for banks and too large and complex for microfinance institutions. Hence they are not able to grow and percentage-wise only provide half of the jobs that SMEs in developed countries deliver. Financing the ‘missing middle’ leads to significant social impact while leaving room for a solid financial return. On our platform individuals can unlock this potential by choosing promising SMEs to lend to. We call this meso-credit.

What are the three main advantages for investors?

We’ve asked each and every new investor what they like about Lendahand and the three advantages that stand out are:

  • You know exactly how your money is used (in control)
  • You get a fair interest rate of 3-4% per annum (financial return)
  • You help creating jobs in poor countries (social return)

What are the three main advantages for borrowers?

One of my colleagues went to the Philippines where Lendahand’s first local partner is based and interviewed 15 borrowers. Key takeaways:

  • For some of the companies, the only alternative are so-called ‘Bombays’. These are men (usually from Indian descent, hence the name) that provide 1-month loans without credit checks. The interest rate is around 20% per month. Lendahand together with its local partner provides loans with interest rates that are closer to what banks are charging
  • Most of the companies are not eligible for bank loans because they’re too small. If they are able to get a bank loan then they need to go through a process that takes a couple of months before they actually get the money. These companies need funds quickly (e.g. a large order comes in) and can’t wait that long. At Lendahand’s local partners they get the funds within weeks if not days
  • Lendahand has set up a foundation that provides non-financial support to SMEs in the form of demand-based training. The funds come from NGOs that donate to the foundation. We’ve held three training sessions so far with a total attendance of 117 SME owners. Once Lendahand is profitable it will donate at least 10% of its earnings to the foundation

Koen The LendahandLendahand cooperates with MFIs. Which criteria do you use when choosing the MFIs you work with?

Lendahand carefully selects its local partners by going through a rigorous due diligence process where it assesses, amongst others, the financial position, portfolio quality, and governance. Typically a local partner has a loan portfolio of more than €5mio, a write-off ratio smaller than 2% and equity capital of at least 10% of the total assets. Although the local partners are for-profit organizations, it is a necessary condition that they have a social mindset and intend to offer competitive interest rates to their clients and screen them for environmental and social impact. The local partners take the full credit risk to the SMEs and so have skin in the game.

How did you start Lendahand? Is the company funded with venture capital?

Lendahand is a social enterprise, i.e. it has a social objective but is run as a business. It was founded in 2011 by Peter Heijen who got intrigued by the ‘missing middle’ and envisioned a solution in crowdfunding. Beginning of 2014 a team was formed: Peter Stolze for marketing and myself for finance and scalability.

Lendahand’s funding mix reflects its status as a social enterprise. It was first funded by a subsidy from the Dutch Ministry of Foreign Affairs and a Dutch NGO. Then angel investors came on board. We’ve also obtained funding through crowdfunding (both equity and convertible debt). Later this year we hope to speak to a few VCs as we are planning on a somewhat bigger funding round.

Is the technical platform self-developed?

We’ve hired an IT agency to develop the platform. We are the owners of the platform. Continue reading →

Interview with Maurizio Sella, CEO of Smartika Spa

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What is Smartika about?

Smartika is a fully licensed Payment Intermediary (IP) authorized to operate in the P2P field by the Bank of Italy and is the leading Italian P2P platform, with over 3,085 loans granted to individuals for  16.5 million EUR, lent by 5,445 lenders.

What are the three main advantages for investors?

Lend money in an innovative and ethical way and take control of how your own money is invested.

What are the three main advantages for borrowers?

Simple process, fast response and good rates (about 3% lower APR than industry)

maurizio-sellaWhat ROI can investors expect?

Lenders have had returns of approximately 6% after fees and defaults.

You originally started as Zopa Italy. Can you share the story with our readers?

We arrived in Italy too early (in 2008) when the P2P business was not understood and “boycotted” by banks and institutions in general. It then took over 2 years to work with the regulators in order to find the best solution for framing the P2P business. The European Directive 2009/110/CE came to our rescue and we were finally granted the license as an IP in 2012.

And what is the situation for p2p lending in Italy now?

Italy is a country of 60 million people, with a consumer market that has finally bottomed (at a still respectable 19 billion EUR) and P2P has the potential to grow exponentially. Time works every day in our favour in terms of trust, reputation, and market penetration at a time when banks and financial institutions are slowly pulling out of the personal loan market. Continue reading →

Interview with Matthew Powell, CFO of Lending Works

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What is Lending Works about?

Lending Works is an online marketplace lending platform for unsecured personal loans. We offer extremely competitive lender returns and fixed rate, flexible loans up to £25,000 over 1 to 5 years.

What are the three main advantages for investors?

  1. Lender protection – our unique Lending Works Shield consists of a reserve fund to cover loan arrears and insurance to protect against the primary reasons for borrower defaults, including loss of employment, fraud and cybercrime. No other peer-to-peer lender offers this. In addition, our underwriting processes are extremely robust, resulting in a 0.00% arrears and default rate since launch
  2. Great returns – our lender returns are extremely competitive and are protected by the Lending Works Shield, so the rate you see is the rate you get
  3. Flexibility – lenders can access their funds early using our Quick Withdraw facility, or can automatically reinvest monthly repayments using Auto Lend

What are the three main advantages for borrowers?

  1. Low cost loans – our loans are offered at market leading rates. By directly connecting our customers and cutting out the bank, we’re able to cut down the cost of a loan significantly
  2. Simplicity – by utilising the latest technology and being an exclusively online platform, we’re able to pay out funds within one working day of completing the simple online application process
  3. Flexibility – borrowers can make overpayments or settle their loans early at any time, without charge

What ROI can investors expect?

Lenders can expect returns of around 4.1% over 3 years, up to 6.0% over 5 years. These rates are protected by the Lending Works Shield so there shouldn’t be a need for lenders to factor in bad debts.

How did you start Lending Works? Is the company funded with venture capital?

We started building Lending Works in 2012 and launched the platform in 2014. The idea was to create a simple and safe platform to enable ordinary consumers to get a fair deal. We tried to make lending and borrowing through Lending Works as simple as possible – most of our customers do not have the time or desire to actively monitor and manage their account. That’s why we opted to steer away from an auction-based or “market” model and introduced features like Auto Lend to automate the reinvestment process.

The company is funded primarily by angel investors. We’ve raised around £4m in funding to date which has enabled us to navigate the launch period successfully. We’re now focused on driving exponential growth through innovative partnerships and new loan origination channels.

Is the technical platform self-developed?

The technical platform is completely bespoke and was initially built by an external digital services agency. Since launch we’ve brought all development activity in-house which allows us to innovate quickly and to regularly release updates. We hired our first Head of Technology, Michael Raasch, in September. Michael has over 25 years’ experience working for large investment banks and has been fundamental in preparing our platform for large scale. Continue reading →

Interview with Asger Trier Bing, CEO of Lendino

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Interview with Asger Trier Bing, CEO of Danish service Lendino.

What is Lendino about?

  • Lendino is a marketplace lender for loans to SMEs in Scandinavia ranging from 20K-2M USD.

What are the three main advantages for investors?

  • Investors get a higher return than from similar asset classes.
  • Investors are enabled to invest in companies that appeal to them (CSR).
  • Investors can invest in their own local area or in a company of a friend.

What are the three main advantages for borrowers?

  • Borrowers get a lower interest on their loan, which will benefit them through decreased funding costs
  • It is faster and easier to apply for funding at Lendino than at a bank.
  • Borrowers can build a stronger relationship with customers who invest in their loans

What ROI can investors expect?

  • Investors should expect a net return of 5-8 percent

How did you start Lendino? Is the company funded with venture capital?

  • Lendino was launched in 2013 by Andreas Christensen and Asger Trier.
  • The vision is to improve finance.
  • The company has been funded by the founders until today.
  • A VC round is ongoing and is expected to close within 30 days.
  • It has a  mix of Danish and UK investors onboard. Continue reading →

Interview with James Buckland, CEO of Loanbook Capital

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What is Loanbook Capital about?

LoanBook Capital is a Spanish peer-to-business (P2B) finance platform, providing an alternative to traditional savings and fixed income products to investors of all types via direct participation in loans, and other forms of credit finance, to mature, good quality Spanish SMEs.

LoanBook provides credit origination and management services to clients. These services are supported by an online platform, which gives investors access to credit opportunities through an auction marketplace, as well as a soon to be launched secondary market for trading loan participations.

What are the three main advantages for investors?

As with other P2B platforms, the main attractions for investors of this model are typically greater risk adjusted returns, control and transparency over investments and lower fees. LoanBook is no different in these characteristics: we provide access to an asset class that offers a return that exceeds that available from traditional fixed income investments with comparable characteristics (e.g. risk and liquidity), we allow investors to manage the risk and return profile of their portfolio online in a transparent way, and we do not charge fees to investors, other than for providing liquidity through our secondary market.

However, LoanBook has some unique features that other platforms do not. Firstly, we offer investors the opportunity to invest in both loans and invoice discounting (in the form of pagarés) through a single marketplace. This provides investors with the ability to better manage their risk by diversifying their portfolio in credits with a variety of risk, return and duration. Secondly, we put a great deal of emphasis on risk management; we have a team of credit risk professionals and have developed an in-house credit rating system that allows us to monitor and manage risk & recovery effectively, which ultimately leads to a better net return to the investors. Thirdly, our team is made up of professionals with institutional backgrounds in investment and credit management, which means that our approach to client service and reporting brings the best of institutional discipline and ‘alternative finance’ ease and transparency.

What are the three main advantages for borrowers?

As with advantages to investors, LoanBook offers the borrower the typical advantages that you would expect from a P2B platform; competitive and transparent cost of capital (interest rates & fees), access to an alternative channel of finance and a quick and easy application process.

Another key advantage for SMEs, over traditional banks, is that we do not ‘bundle’ our service with other products or services, such as insurance, deposit accounts or Director business. This enables SMEs to separate their working capital requirements from personal and ongoing operational financial needs. Furthermore, as is the case for investors, LoanBook has some unique advantages over its peers. Firstly, unlike other platforms that focus on a single form of finance, we are able to offer borrowers three types of finance in the form of loans, short-term revolving credit lines and finance via the discounting of ‘pagarés’. And secondly, we are not purely an online service; having a team of experienced credit professionals enables us to take a personal approach to managing relationships with SMEs.

How did you start Loanbook Capital? Is the company funded with venture capital?

LoanBook was started at the end of 2012 by two founding partners with their own capital and initiative. The company’s shareholder base has moved on somewhat since then, with each of the three-man management team, and a number of the employees, having an ownership stake in the company. Continue reading →