P2P Lending marketplace Rebuilding Society just announced that it has received full FCA authorisation.
Rebuilding Society has been awarded full authorisation from the Financial Conduct Authority in recognition of our compliance with sector-specific regulations.
We are very excited to share news of this major achievement and important milestone with our community. Authorisation means that we meet the rigorous standards set by the FCA and that we can soon start to offer the Innovative Finance ISA.
Although we have been operating under FCA rules on Interim Permission since April 2014, being granted full authorisation helps us to continue building on the important relationships of trust we have with all our clients. We are proud to have achieved this milestone ahead of many other platforms, which we believe is testament to our small but dynamic team, systems, processes and controls.
It has been a long journey, consuming considerable energy and investment, since we applied for full authorisation in November 2014. We have continued to grow as a business and improve on our core processes throughout. The regulatory landscape is continuously changing, and we will make sure we stay abreast of developments that arise from our post-implementation review.
We are committed to delivering a top-quality service to all our customers, to assist investors by providing multiple investment options and to assist our borrowers in finding business finance that is more than just a financial transaction. We are now taking pre-registrations for the IF ISA and will confirm once we can on-board new accounts. Please look out for further updates; we know that many of you are keen to benefit from frequent, compounded returns.
Since my p2p lending investments are heavily concentrated on UK and Baltic services, one of my New Year’s resolution for 2017 was to diversify into other markets. Therefore in January I opened an account at French p2p lending service Lendix. Lendix is a p2p lending marketplace offering loans to SMEs in France and Spain (read earlier articles on Lendix). It is one of the larger players in continental Europe. Signing up was straightforward. While the minimum bid on loans is just 20 EUR, the minimum amount for deposits and withdrawals is 100 EUR. Investors can deposit either via bank transfer or via credit card (limited amount). Depositing via credit card is a nice feature which is rarely offered by p2p lending services. I like it because I can react within a minute to new loan announcement emails. This is necessary too, as many new loans are fully funded within an hour – and there is no autoinvest. Nearly all actions require two factor authorisation by a code sent to my mobile.
Lendix loans carry interest rates from 4 to 9.9% and are for loan terms between 3 and 84 months. There is no fee for investors and no withholding tax for foreign residents. Each loan is assigned a rating score of A, B or C by Lendix. There is also a detailed loan description for each loan. While most of the site is available in English language, loan descriptions and contracts are in French language only.
So far Lendix has done a very good job in vetting borrower applications. The default rate to date is low – only 0.11%. However the marketplace is young and growing and I expect the default rate to rise with time. Also it remains to be seen, if the perfomance of the Spanish loan will be comparable to the French loans.
As there is no secondary market, investors are bound hold the loan to maturity.
Review of my Lendix portfolio
I only just started in January. I concentrated on A and B grade loans, putting 100 EUR in most of them and 20 EUR in those that seemed not as convincing to me (e.g. a loan to a hotel that, when I looked it up on a hotel booking comparision site, had less satisfied customer reviews than the four other competing hotels in the same village). I skipped the new spanish loans.
Right now I have invested 640 EUR in 8 Lendix loans. I would have invested more, but I found the dealflow to be rather sparse in January and February. My average interest rate is 5.9%. This month I received my first repayment rate. Experiences of more seasoned investors report that repayments are usually on-time.
New investors get 20 EUR cashback bonus from Lendix when signing up via this link, once they have invested at least 500 EUR.
Screenshot of my Lendix loan portfolio – click for larger view
P2P lending marketplace Finbee has so far offered consumer loans only. Now Finbee is extending the product range to SME loans. Finbee sources the applying companies through a separate website and will focus on small loans up to 15K EUR and a term of 12 months. For most business loans rates will be fixed without an auction (which Finbee uses to set interest rates for consumer loans). Different to consumer loans, investments into business loans will not be covered by the Finbee compensation fund (CSF), if the loan defaults. Each loan application will be individually assessed, by assigning risk grade from A+ to D, where A+ is a low risk loan, D – high risk loan, based on reputation of the management (20% of risk grade), financial sustainability (60% of risk grade), market situation (20% of risk grade).
Audrius Griskevicius, head of SME lending, told P2P-Banking: ‘SMEs in Lithuania have very limited access to financing. As result of this, the government issued a law, allowing p2p lenders to issue loans for small business. Finbee took an active role in development of necessary regulation and we are very proud to be the first one to receive a license of p2p lending to SMEs.’
The first business loan listing is online. Magava wants to borrow 10K EUR working capital for 12 months at 15% interest rate. Investors have to complete a self assessment survey before they can invest into business loans.
SME lending platform Bitbond today announced the closing of an equity funding round of 1.1 million EUR. This round brings Bitbond’s raised equity capital to a total of 2.2 million EUR.
Led by mobilike founder Şekip Can Gökalp, a number of business angels contributed to the round. Among them were Fyber founders Janis Zech and Andreas Bodczek as well as Kreditech co-founder & CEO Alexander Graubner-Müller.
Bitbond will use the additional funds for further product development and to grow its user base in markets which are underserved by traditional lenders. Over 1,600 loans worth 1.2 million USD were originated on Bitbond since its launch. 76,000 users from 120 countries registered with the service to date.
Founder & CEO of Bitbond Radoslav Albrecht said: “The additional resources will help us to continue realizing our mission which is to make lending and borrowing globally accessible. We are happy to have such experienced investors supporting us on this exciting journey.” Albrecht contributed a guest article on bitcoin p2p lending in the past on P2P-Banking.
In October 2016 Bitbond received their own regulatory licence by German financial services supervisor BaFin. This makes the service one of the first and only regulated blockchain based financial services providers.
The startup from Berlin connects investors who look for above average fixed-income investment opportunities with small business owners who need a loan. To make global cross-border lending possible, the platform uses the bitcoin blockchain for payment processing. Continue reading →
Today secured by property p2p lending marketplace Landbay launches its Innovative Finance ISA (IFISA). The IF ISA offer carries an interest rate of 3,69%. The minimum investment amount for this product offer at Landbay is 5,000 GBP. There is no account opening fees, no ongoing fees and no transfer-in fee. There is a 50 GBP transfer-out fee.
Investors can make use of the current annual tax‐free ISA allowance of 15,240 GBP. In the next tax year the allowance will rise to 20,000 GBP.
The University of Cambridge, Monash Business School and Tsinghua University launch the 2016-2017 Asia Pacific Alternative Finance Industry Survey with the support of major industry associations across the region.
From equity-based crowdfunding to peer-to-peer consumer and business lending, invoice trading to reward-based crowdfunding, these alternative financing activities are supplying credit to SMEs, providing venture capital to start-ups, offering more diverse and transparent ways for consumers to invest or borrow money, nurturing creativity, fostering innovation, generating jobs & funding worthwhile social causes across the Asia Pacific region.
Opening on February 15th 2017, this benchmarking survey aims to capture the key trends, developments, size, transaction volume and growth as well as the impact of changing regulations on the alternative finance markets across Asia in 2016 – building on last year’s inaugural study.
Last year’s inaugural report – Harnessing Potential – gathered survey data from 503 leading alternative finance platforms operating in 17 Asia-Pacific countries and regions. The study was cited by over 100 mainstream media organisations and has informed policymakers and regulators of industry developments in Asia Pacific countries including Malaysia, Singapore, India, Australia, Hong Kong and Indonesia for example. The report estimated the total Asia-Pacific online alternative finance market to have grown 323% year-on-year to reach 102.81 billion USD in 2015. China is the world’s largest market by transaction volume, registering 101.7 billion in 2015. Outside mainland China, the rest of the APAC region accrued 1.12 billion USD in 2015 with a 313% year-on-year growth rate from the 271.94 million raised in 2014. The authors hope this year’s study will dive even deeper into the growth and dynamics of the APAC alternative finance market. Continue reading →
Auswide Bank Ltd (ASX:ABA) is increasing its equity stake in peer-to-peer lender MoneyPlace Holdings Pty Ltd (MoneyPlace). Auswide Bank will have a controlling interest of at least 51% in MoneyPlace with the prospect of increasing that interest up to 75% dependent on the final take up of other MoneyPlace shareholders in a capital raising initiative being undertaken by MoneyPlace.
MoneyPlace launched in October 2015 after receiving its retail and wholesale Australian Financial Services licence and provides loans of 5000 to 35,000 AUD through its peer-to-peer lending platform. Auswide Bank acquired a 19.3% equity stake in MoneyPlace in January 2016 while also committing funding to the Melbourne – based P2P lender’s consumer lending program.
Managing Director, Martin Barrett said Auswide Bank has been impressed with the platform, skills, capability and performance of MoneyPlace over the last 12 months, “Our funding has now exceeded 8 million AUD over the last 7 months and momentum continues to build. Loan quality has also been performing above expectations and we remain optimistic regarding future growth opportunities for the MoneyPlace and Auswide Bank partnership.”
mozzeno is a Belgian fintech founded in December 2015. We have just launched the first digital platform to enable private individuals to participate indirectly in the funding of loans to other private individuals. Loans are granted by mozzeno, acting as a regulated lender. mozzeno then finances or refinances these loans thanks to the issuance of Notes (financial instruments).
What are the three main advantages for investors?
Investors can expect higher returns compared to deposits or saving accounts in Belgium (currently close to 0%).
mozzeno performs a strict selection of borrowers and eases the diversification of investor’s portfolios.
Investors can benefit from a ‘PROTECT guarantee’, covering between 60% and 100% of the loan outstanding amount and up to 3 unpaid instalments, in case of default.
Investors can choose between manual or automated (re-)investments, with very granular selection criteria to match their risk appetite and investment preferences.
What are the three main advantages for borrowers?
Borrowers can benefit from competitive market rates, proposed dynamically based on their assessed risk profile. This cost of credit can also be further reduced, thanks to a specific incentive we put in place. Borrowers repaying systematically on time over the loan period are getting a part of the origination fee back on their bank account at the end of the loan term.
Interests paid by the borrowers are benefitting to other people like them, not to banks or other financial institutions. An increasing number of people are sensitive to these sharing economy principles or simply open or looking to financial solutions outside of the traditional banking system.
The loan application process can be completed fully online and digital. Even the loan agreement can be signed digitally thanks to eID. If the borrower chooses the proposed digital options, the whole process can be done without any paper on any side (borrower and mozzeno).
What ROI can investors expect?
Investors are building their portfolio of Notes themselves, picking up underlying loans manually or thanks to automated investment profiles. The selection can be made based on criteria like the loan purpose, the risk class, the maturity, or more advanced criteria like net income, housing status, professional status… Hence, the return an investor can expect really depends on the type of investment strategy he will follow. As an average we target to provide 3% before tax, the maximum expected return is about 5,79%.
Is the technical platform self-developed?
Absolutely, we started the development of the platform internally in November 2015, in parallel of the regulatory track. From the beginning, the ambition has been to develop a highly modular, scalable and multi-lingual platform that can be leveraged for other sharing economy use cases, under our own brand or through white-labelling. mozzeno services, mother company of mozzeno, develops such a B2B business model, and can provide a range of existing modules (eKYC, digital boarding, transaction orchestration, scoring…) to other financial players, as well as co-develop complementary modules with them.
What credit rating / credit history data is available on Belgian consumers and how reliable is it?
There is a very high concern for the risk of over-indebtedness and for retail consumer protection in Belgium compared to other EU countries. There is no developed pay day loan or subprime business, as the interest rates and maturity are capped and the lending activity restricted to regulated lenders. These regulated lenders have the obligation to register all granted loans (mortgages, personal loans, credit cards, credit lines, overdrafts…) to the Central Individual Credit Register managed by the National Bank. This database also includes information on defaults. As a regulated lender, mozzeno is contributing to this CICR and has access to this market-wide credit history database (positive and negative sides).
As a consequence of this market specific, there is no other established credit bureau. With regards to credit rating, we have developed our own scorecard with a specialised company, we continue to further develop it, and we also benefit from the well trained scoring of our credit insurer.
How is the company financed? What background does your team have?
The company has been initially founded and funded by my partner, Xavier Laoureux, and me. Xavier has a master in Law, has worked more than 10 years in digital marketing strategy for agencies like TBWA. I have been working 15 years in the online payment business, namely for Ogone and then for Ingenico ePayments. Tom Olinger, former CFO of a mid-size Belgian bank, has joined the management team in April 2016.
Some fintech business angels and W.IN.G (a Belgian seed fund) have taken part to a seed round in Q2 2016. A further funding round should take place in the course of 2017.
Mozzeno founders: Tom Olinger, Frédéric Dujeux, Xavier Laoureux
Can you please describe the p2p lending regulation in Belgium?
Well, actually p2p lending as such is forbidden by law in Belgium. On one hand, the European prospectus law has been adapted locally very strictly, preventing individuals to raise funds publicly, even through an intermediary platform. This means that a borrower candidate cannot invite other people publicly to lend him money. On the other hand, one needs to be a regulated lender to grant loans and to get access to the Central Individual Credit Register. There is a new regulation as from November 2015, this regulated lender status now being supervised by FSMA.
Our regulatory model is then two-sided. We were the first Belgian regulated lender approved by the FSMA as per the new regulation, and this allows us to grant loans for Belgian residents. We also published a base prospectus, also approved by the regulator, allowing us to issue Notes on a continuous basis. These Notes are the financial instruments subscribed by the investors, similar to bonds, and mimicking the repayment behaviour of the underlying loan.
mozzeno is the first p2p lending service in Belgium. Compared to other European countries Belgium had to wait long for a p2p lending marketplace. Is regulation the cause for this, or are there other reasons?
The complexity of Belgian regulation is obviously the main reason. This so called banking monopoly made a ‘simple’ direct model for peer2peer lending completely impossible in Belgium and a few previous attempts have failed for that main reason. Our indirect model copes with this complex regulation and the operational model of the platform has been thought to be as close as possible to p2p lending from a user experience perspective.
Having said that, Belgium also remains typically a complex market due to the different languages and cultures as well the limited size.
What is the reaction / the viewpoint of banks, if you talk to them about p2p lending?
We have discussed with the main Belgian banks over the past 2 years, and the initial reaction was scepticism due to the complex regulation and the required regulator green light still ahead of us at that time. Now that we have the required regulatory agreements and that we are live, we are seeing diverse reactions, either enthusiastic or defensive. This is of course too early to draw any conclusion on this. We are, on our side, convinced that both models are complementary, and open to share views and discuss with banks and other lenders. We have applied to the relevant industry associations to foster such exchanges.
What was the greatest challenge so far in the course of launching mozzeno?
Certainly the complexity of Belgian regulation, with regards to p2p lending, and the time needed to define and set-up the required structure, with first discussions with the regulator as from March 2015. While we understand and agree with each of the requirements, questions and challenges we have faced so far, it is fair to say that this is not always compliant with a startup agenda.
Which marketing channels do you use to attract investors and borrowers?
For borrowers, we are planning to use mainly digital channels, with the best mix possible between natural, earned and paid traffic sources. For investors, beside the same digital channels, we plan to organise roadshows and meet investors physically to build trust in the platform. We will respectively orchestrate the marketing effort based on the demand/supply balance.
On both sides we also intend to set-up member-get-member programs.
Is mozzeno open to international investors? Do you plan an international expansion?
As most businesses starting from Belgium, an international expansion is integrated in the plan from day 1, due to the limited size of the domestic market. On the investor side, our main commercial focus at launch is on Belgian retail investors, but we can technically accept retail and professional investors from EU today. Our prospectus can also benefit from an EU passport, for countries in which we will target a real commercial focus on retail investors. On the lending side, regulations are not harmonized at EU level, so our internationalisation strategy will be a mix of partnerships with assets originators and own expansion, based on opportunities.
Where do you see mozzeno in 3 years?
We see mozzeno as becoming a trusted and representative player in Belgium, having a footprint in some other EU markets, either through partnerships or under our own brand. With mozzenoservices, white-labelling our technology has also a great place in our plans (innovative scoring systems, platforms for the sharing economy, seamless digital boarding processes…), with expectations to partner with the most ambitious fintech, insurtech or traditional players, helping them in their launch or digitalisation roadmaps.
VIAINVEST is a peer-to-peer lending marketplace offering both private individuals and companies to invest in consumer loans originated across Europe. VIAINVEST follows worldwide trend and offers investors safe and more effective investment opportunities than traditional banks do. The main aim of VIAINVEST is to ensure outstanding investor support as well as provide easy and accessible investment environment that does not require useless actions or extra time for understanding ongoing processes.
What are the three main advantages for investors?
VIAINVEST is a truly customer-oriented company, and we strive to provide the most satisfying investing experience possible. Great deal of investors’ concerns are related to investment safety, so all loans listed on VIAINVEST are secured with a Buyback Guarantee. Also, to guarantee that one investor will never be 100% committed to particular loan, originators keep 5% “skin in the game” for each loan.
To develop the platform that would be convenient and easy to use, we encourage investors to leave their feedback; each of recommendations is reviewed and most of them are included in our future updates list.
What ROI can investors expect?
Currently investors can choose to invest in loans originated in the Czech Republic with 12% annual ROI and Spain – up to 12,2% annual ROI depending on the loan.
VIAINVEST was founded by the mother company VIA SMS Group. Can you please describe what VIA SMS Group does and why it decided to set up the VIAINVEST marketplace?
The launch of VIAINVEST was great refresh for VIA SMS Group that is alternative finance services provider operating across Europe. Until now VIA SMS Group was mainly operating in consumer lending market but with VIAINVEST the company is making a shift from non-bank lender to a fintech company. Currently VIA SMS Group is offering its services in 5 countries – Latvia, Sweden, Poland, Czech Republic, Spain – and has recently launched several new products to diversify its product portfolio. From the end of 2016 the company is also offering payment card with credit line SAVA.card, savings product VIASPAR for Swedish clients as well as there is still an opportunity to invest into company’s bonds. The company has great development plans, but outstanding customer care will always remain the most important goal.
VIA SMS Group is active in more countries than in Spain and the Czech Republic. Will loans from other countries be listed on the VIAINVEST marketplace soon?
This is actually the next update planned for VIAINVEST – in following weeks we will publish loans originated in Poland and Latvia, Sweden will also follow in the nearest future.
Is the technical platform self-developed?
Yes, we have built VIAINVEST from scratch. As we prefer to have full control over all processes, we have great team of IT professionals employed in house to ensure continuous support at any time.
What was the greatest challenge so far in the course of launching VIAINVEST?
As VIAINVEST is not the first platform entering the peer-to-peer lending market, we had a lot of examples to learn from. I can say that there were no critical problems within the development process, adjusting VIAINVEST to the specific needs of investors on the go is more challenging!
Which marketing channels do you use to attract investors?
We mainly use digital marketing, but reaching out to the fintech influencers and opinion leaders is more effective tool to spread a word about VIAINVEST. As clients of peer-to-peer lending platforms are specific group of people with certain interests and goals, you need to be more creative and intelligent within any advertising activities.
Is VIAINVEST open to international investors?
VIAINVEST is open to any investors holding a bank account within the European Union or other country to which the requirements arising from European Union legislation on the prevention of money laundering and terrorism financing apply. Currently there is no legislation in Latvia regulating operations of peer-to-peer lending platforms, but it may be developed in 2017, so VIAINVEST is already implementing existing regulations.
Where do you see VIAINVEST in 3 years?
Fintech is changing traditional finance world in such pace, that it is hard to predict what will happen even in a year. VIAINVEST will definitely continue to expand its loan originator list and implement new features to make online investing mush easier and accessible to everyone. We have great plans, first news will be out soon, stay tuned!
It’s important to work for a company that you respect and provides a product good for its customers. It’s classic dinner table question, “what do you do for a living”. Mostly I’ve always worked for large blue chip companies including Standard Chartered Bank, PriceWaterhouseCoopers, Centrica, FICO, MasterCard and Lloyds Banking Group. So although I wasn’t going to set any dinner party conversations alight, I didn’t have to admit I worked as an estate agent, politician or worse. Then I worked with RateSetter and I became actually proud of my employment, what’s not to like about working for an internet start-up in something funky called “peer-to-peer”. I was helping to provide a better product to a new type of investor called a “lender” in a new asset class that was providing fair and consistent returns. We were bringing a new lexicon to banking and innovations such as the Provision Fund. Borrowers also got a better deal from a company with excellent customer service, not disdain. I wasn’t a banker anymore, I was working in the “sharing economy”, a financial hipster….
However I’ve been lucky to have these employment choices. I’ve been the first cynic to sit on his pedestal and mock those that worked for less altruistic companies. And when I met people working for high-cost short-term lenders, I never let them forget it. I wasn’t a supporter of the football clubs that took their money to advertise a terrible product on their shirts. This is especially personal as I have a family interest, someone that isn’t so financially literate (and to be blunt, who was in dire straits) that borrowed 300 GBP, and ended up having to pay back 1,200 GBP within nine months. As far as I was concerned the sub-prime pay-day loan industry had a poor reputation for a reason, some lenders were exploitative. I mean, can anyone really defend 5,000% APRs? So why have I agreed to work for a short term lender, The Money Platform. A few of my friends are already looking down on me from that moral pedestal that I previously sat upon. Continue reading →