lucas banach

Polish P2P Lending Site Monetto Goes Under

Michal Kisiel

In e-mail newsletter sent to its users on January 20th the operator of Polish peer-to-peer lending site Monetto.pl informed that the website will be accessible only until the end of February. Lenders are urged to update the loan contracts and to change the number of bank account set up for repayments. Monetto will no longer intermediate in processing repayments and loans should be repaid to lenders’ accounts directly.

Monetto was one of the early entrants to Polish social lending market. The company was financially backed by venture capital fund IIF. From the beginning the market was plagued by the influx of unfair borrowers, partly due to the insufficient verification procedures. Lukasz Banach, CEO of Prender Ltd. – the company behind Monetto project, reflected in the interview for finnovation.pl in September 2009, that what attracted crooks might be higher (than on other P2P lending markets in Poland) initial limit of loan amount. He also said: “In USA, UK (also Germany) there are central, accessible and trustworthy databases of credit history. As long as there is no such thing in Poland, I don’t believe that social lending will be successful here. When this barrier is removed, the percentage of bad debts on P2P markets will fall down significantly. ”

Things started to get worse in the end of 2008, when VC investor decided to stop financing the project. Since January of 2009 Monetto was in “coma” – there were no new loan listings, repayments were forwarded to lenders infrequently and there were significant problems with customer service. The investors made an effort to sell the service (although it was never announced officially) but no interested buyer was found.

The announcement is viewed by many as the last act of the drama which lasted far too long. In few articles that were published in press, the negative consequences for the credibility of social lending model in Poland are stressed. In other opinions there is a little bit of optimistic tone – failure of Monetto shows that market weeds out the weaker and less secure players.

Poland: Monetto has financed 1 million Zloty loans in 4 months

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Monetto.pl, one of the three p2p lending services active in Poland has financed 1450 loans applications resulting in 440 loans totaling 1 million Zloty (approx 0.5 million US$) in 4 months. The average loan amount is 2300 Zloty. The service claims 8000 registered users and a repayment rate of 97% so far (which is said to be a good result).

Borrowers are usually aged 35 to 50, and live in rural areas or small cities. Lenders on the other hand are typically aged 25 to 30 and live in the major cities.

Monetto plans to introduce new features, including guarantees for lenders.

Lucas Banach, CEO of Prender the company that runs Monetto, says that cooperations with e-commerce sites (e.g. Kupujemy.pl) are essential for the growth of Monetto.pl.

Competitor Kokos.pl claims 13000 registered users and 1.2 million Zloty loans on its website. Kokos launched 5 months ago.

(Sources 1, 2, 3, 4, 5, 6)