isepankur

How to Lend at Isepankur – Step by Step Guide

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Recently, p2p lending service Isepankur opened to international lenders. Residents from any European Union country and Switzerland can now sign up and start investing. There are no fees for lenders. I wanted to gain first hand experience as soon as possible so I signed up immediately and now share the process.

Getting started – Registration

Registration takes place completely online. First click on ‘Join for free’ and choose a username and a password. Isepankur now sends an verification email. After confirming that, there is a form where the personal details are entered. Also choose between confirming bids via password or mobile ID.

Depositing funds

Depositing funds is done via SEPA bank transfer. For transfers done in Euro this does cost the same bank fee as a domestic bank transfer – in my case it was free. I transferred 1,000 Euro in and the amount was credited to my account the next day.
Before investing is possible, Isepankur needs to confirm the identity of the lender. That was completed the same day the money arrived, and I was ready to start investing.

First investment

Isepankur uses an auction model, where individual p2p loan applications are listed. Lenders can either manually bid or use investment profiles for automatic bidding. Under ‘Invest’, ‘Investment Opportunities’ is the list of open loan auction. There are two different types: those that close immediately once 100% funded and those that continue to run until the auction time ends with investors underbidding each other’s interest rates once 100% funding is reached.

By clicking on a loan listing, the detail information can be reviewed. Isepankur only allows fully employed borrowers on the marketplace and checks their income and credit history.


Sample of the detail information on the loan application. Lists age, type of employment, length of employment, education level and home ownership.


Sample of the detail information on the loan application. The borrower has an income of 775 Euro and existing liabilities of 165 Euro per month. Continue reading →

Isepankur Launches International Peer To Peer Lending

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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.

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 →

P2P Lending Year-End Review 2010

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As the end of 2010 approaches here is a selection of main peer-to-peer-lending news and developments covered by P2P-Banking.com:

(Photo by paul (dex))

P2P Lending With Cars as Collateral

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German p2p lending service Auxmoney.com has introduced a new feature this week. Borrowers can now offer a car as collateral for a p2p loan.

The user pays a fee of 9.95 Euro to document this in his loan listing. Pictures of the car, the model and the mileage and the estimated price a car dealer would pay for car are displayed in the listing. In this example listing, the borrower puts up his BMW as collateral. The estimated value covers 101% of the loan amount requested. In general the car can cover any percentage of the loan amount – it does not need to cover the full amount. Furthermore there is information on the type of insurance coverage.

If the loan is funded, then a contract defines the terms of the assignment as security. The borrower continues to drive the car (obviously he is not allowed to sell it without the consent of Auxmoney), but needs to deposit the certificate of ownership (motor vehicle registration certificate) at Auxmoney. This arrangement costs the borrower 2 Euro per month.

Should the borrower fail to repay the loan, then Auxmoney has the right to sell the car.

While a car as collateral does in not provide fail-safe security (many things can happen), it will be probably perceived by lenders as one feature for higher security against defaults.

The Wiseclerk Auxmoney stats page will in future track the performance of p2p loans secured by cars.

This is a first for p2p lending – but soon another p2p lending service will follow. Pärtel Tomberg, CEO of Estonian p2p lending service Isepankur told P2P-Banking.com earlier this month, that Isepankur will introduce cars and real estate as collateral for p2p loans in the second half of 2010.

(Photo by pedrosimoes7)

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 →