Interview with Eyal Elhayany, CEO of Tarya

What is Tarya about?

TARYA is the largest Israeli P2P lending platform built from the ground up, whose aim is to provide an online (24/7), financially beneficial experience for both borrowers and lenders. At the foundation of the platform is an advanced credit-scoring model relying on big data underwriting algorithms based on fraud prevention procedures

The platform founders have previously worked in both technology and regulation, and observing the state of the economic environment – local and global events and trends, we sense that conditions are ripe for fresh, more beneficial financial offerings to be accepted by the general public.

TARYA is headed by experts in fraud prevention technology and regulation, and has become a major player in the Israeli Crowdfunding transformation in order to supply consumer credit without bias. We are tackling regulatory, business and cultural challenges and – being the leading company – are excited and satisfied of the progress made so far.

What are the three main advantages for investors?

Diversification, diversification and diversification. The key to successful investments in P2P is diversifying the investor’s portfolio by offering:

  1. Automated Investing and Reinvesting – the Investor defines risk and return preferences, while the platforms algorithm allows for a hands-free experience.
  2. Varied borrower types – TARYA continues to develop partnerships with employers and social projects across the nation, thus providing both solid and risky borrowers, from different sectors of the Israeli economy.
  3. Low minimum participation amount in loans – The minimum amount for investing in a loan starts at only 50 NIS (equivalent to 10 Euro).

What are the three main advantages for borrowers?

TARYA being an online financial service, provides borrowers an efficient and up-to-date approach for loan application:

  1. Transparency – The process is performed online, without having to “wait-in-line” at the bank. Payments, interest rates and terms are presented up-front with an emphasis on “consumer protection”.
  2. A FinTech Experience – TARYA is a unique and pioneering initiative that facilitates the direct connection between borrowers and lenders, using an online platform. This platform bypasses existing credit entities – banks and credit card companies, and allows borrowers to obtain credit at significantly lower costs. Interest rates range from 3.5%-8.0% depending on the borrower’s credit rank. Of note, non-banking (credit cards) interest rates for borrowers average 11%.
  3. Business Partnerships – TARYA’s unique model grants upgraded loan terms for borrowers whose personal details are authenticated by their employers. This practice benefits all employees of the organization, who can receive loans at rates above their personal credit rating.

eyal-elhayanyWhat ROI can investors expect?

Lenders investing in diversified and micro-financed portfolios average between 5%-6% returns after fees. Lenders pay a fee of 1.0% on returns.

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

We believe the venture has the potential to change the structure of the credit market in Israel: It is widely accepted that the Israeli banking sector is concentrated and not competitive, especially in regard to the household and small businesses sectors. Since setting up shop in May 2014, TARYA has been growing in borrowers, lenders and partner organizations.

TARYA is funded by private equity. Since establishment, we’ve received several applications from VC and institutional investors.

Is the technical platform self-developed?

The platform is developed internally, built from the ground up with underwriting and credit rating processes that combine banking know-how, statistical modeling and technology professionals with extensive expertise in online fraud and information collection from social networks and other sources.

The diverse expertise of our team and the advanced technology is giving us a competitive advantage and will enable us to confront upcoming challenges head on.

What was the greatest challenge so far in the course of launching Tarya?

So far, we see the main challenge in changing market perception – both for borrowers and investors. Organically, investors are wary of young, disruptive players. Borrowers approach the solution cautiously – trying to find the snag in being offered such low rates.

How is p2p lending regulated in Israel?

There is no regulatory regime for P2P platforms in Israel. There are, however, statutory provisions pertaining to loan agreements dealing, among other issues, with disclosure and limiting the interest rate, all those as part of consumer protection rules.

As of 2015, TARYA is front-running the establishment of regulation for the Israeli P2P market, collaborating with relevant government organizations.

Compared to the UK or US market, what is the state of p2p lending in Israel?

Thanks to established, leading platforms such as Lending Club, Zopa and others – P2P lending in Israel is growing to be a mature business environment.

Israel – in its core a start-up nation is dependent on a stagnant financial system which has no means for objective and transparent credit-scoring. The effects of P2P and crowd funded FinTech is substantial and radical.

Which marketing channels do you use to attract investors and borrowers? Can you share the acquisition costs per customer?

Marketing channels are mainly online, focusing on borrowers and lenders which are fitting for the platform’s growth stages.

Borrowers accepted during the first stage of platform operation are in part employees of partner organizations, and the rest – from the general public. Lenders include the general public or institutional entities.

An organization that is interested in offering loans to its employees through Tarya confirms personal details of the employee (after they have been entered online), supplementing the underwriting process and deducting (with the approval of the employee) the monthly loan repayments from the employee’s salary. The organization’s involvement is merely technical – it is not obligated to finance the loans and does not have any liability to either the employee or TARYA.

TARYA has also partnered with various additional organizations that comprise an additional stage in the underwriting and approval process of the borrowers in the system.

Do you plan to cooperate with institutional investors? In which way?

Since Tarya is the principal representative of P2P lending in Israel, we receive wide-ranging requests for cooperation and investing in TARYA from institutional players.

For obvious reasons, at this stage we cannot divulge any more information on the subject.

Do you plan an international expansion? Can non-residents use your platforms as investors?

Currently we are in process of replicating TARYA’s competitive advantages and technology to Europe and other domains, some of which include very dominant key players.

Where do you see Tarya in 3 years?

We believe that TARYA’s portion in the Israeli credit market will grow by 20 times as it is today, enabling thousands more of borrowers and lenders to rely on our platform, creating a supplier-consumer financial community. We see TARYA as one of the major competitor in global markets as well, relying on our unique underwriting solution. thanks Eyal Elhayany for the interview.

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