This is a guest post by Roman Feranec, CEO of Žltý melón (full bio at the end of the article)
Slovakia is an Eastern European country with 5.5 million inhabitants. The country borders with Poland, Czech Republic, Hungary and Ukraine. Regarding its real GDP per capita exceeding 10 thousand EUR, it is one of the most developed countries in eastern European region. Slovakia is a NATO and EU member and in 2009 the country joined Eurozone and started using EURO as its currency.
Peer to peer lending, also known as Marketplace lending, started in Slovakia at the end of 2012. In just two years of operation it proved that it could be an interesting financial alternative with valuable benefits for people in need of money, as well as for people looking for a stable and good appreciation of their savings. This all despite the fact that Slovaks are generally more conservative than their peers in western countries and banks in Slovakia were almost no hit by the recent financial crises.
The Slovak market of unsecured consumer lending reaches a volume of approximately 150 million EUR in new loans every month. There is a big competition between 12 retail banks keeping the average interest rate at about 14 % p.a. P2P loans at the moment represent just a tiny fraction of the market with 0.1 % market share. This can also show a huge growth potential for this alternative.
The first and so far the only domestic P2P loans provider is called Žltý melón. The company was set up by a team of people with long-term experience in banking and financial industry. Žltý melón was launched at the end of 2012 and since then it has provided about 2 million EUR of loans with current volumes of 160 – 200 thousand EUR of new loans per month. It provides ordinary unsecured retail consumer loans – purpose or non-purpose. Recently it has also introduced loans for financing real estates with a guarantee for investors covered by real estate and also company guarantee of major development company. The new product is one of the outcomes of a bigger partnership between Žltý melón and local leading residential developer Cresco Group. Continue reading