International P2P Lending Volumes May 2017

The table lists the loan originations of p2p lending marketplaces in May. Funding Circle leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 500 million Euro. This is over 10% higher than the previous month and that despite the adverse effect of the pound taking a dive. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Paskoluklubas.

Milestones reached this month are:

  • Assetz Capital crosses 250 million GBP lent sinch launch
  • Lendinvest reaches 1 billion GBP in origination since launch

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA providers.

p2p lending volume May 2017
Table: P2P Lending Volumes in May 2017. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Interview with Evaldas Remeikis, Chairman of the board at UAB NEO Finance, Marketplace Paskoluklubas

What is Paskoluklubas about?

NEO Finance is the leading P2P lending platform „Paskolų klubas“ in Lithuania. The platform is an intermediary for consumer loans connecting lenders directly with borrowers. We believe that fintech company should be not only innovative, but also professional. This is why we gathered a strong team of senior experts from the banking sector with the expertise in consumer lending, bank management and risk control. Currently all of “NEO Finance” activities are supervised by the Bank of Lithuania due to obtained e-money license, P2P license and as a consumer lender status, to ensure that responsible lending criteria is enforced.

We have a unique platform that we developed our self to fit the needs of our investors. NEO Finance offers buyback and provision fund services, which minimizes risk for lenders. Moreover, partnership with Legal Balance, UAB enables platform’s users to experience the benefits of 7+ years of delinquent loans recovery know-how.

By transferring money to “Paskolu klubas” account investors deposit it into e-money IBAN account under their own name and hold all of the money under their control till the investment is made.

Our main goal is to ensure a sufficient supply of loans are listed in the primary market, so that our investors can cherry-pick the loans adequate to their investment strategy.

What are the three main advantages for investors?

  1. Provision fund service. By voluntarily paying a provision fund fee, more conservative investors can be secured from delinquent or defaulted loans. If a borrower is late with the installment, provision fund immediately covers that installment. The fund holds largest amount of proceeds to cover late payments in the Baltics and holds more than 100 000 EUR at the moment.
  1. Buybacks. Investors, who did not choose the provision fund service, can sell defaulted investments to “Paskolu klubas” for 50-80% of its face value. Instead of waiting for a relatively long recovery process they can reinvest their money into other loans.
  1. Higher interests rates of return. In Lithuania, we operate in market of higher interest rate. Currently our average interest rates are as fallowed for each of the credit rating: A – 13 % B – 17% C – 20%. This creates opportunity for investors from all over the Europe to receive higher returns.

What are the three main advantages for borrowers?

  1. Lower fees for borrowers. As our fees are one of the lowest for borrowers, therefore half of the borrowers choose “Paskolu klubas” loan as an alternative for a bank loan.
  2. Possibility to get an instant loan. Since we developed in-house state-of-the-art IT platform ourselves we can offer unique features for borrowers and investors. One of them is instant loan service. Investors can set up their automatic investment tool and borrowers can see what amount they can borrow at what rates, as the system collects all automatic investment orders starting with the lowest rate and building it up to meet the needs of a borrower. This feature enables investors to invest their capital faster.
  1. No upfront fees. Unlike other platforms Paskolu klubas does not charge upfront fee from borrowers. Borrowers do receive the exact amount they borrow. Platform fee is deducted from the payments, this way we take the risk together with investors and are able to offer barrows flexible barrowing.

What ROI can investors expect?

10-18% after taxes. One investor did an experiment with 4000 EUR initial deposit. Half of the investments were made using a provision fund service, 5 defaulted investments were sold to NEO Finance and some investments were sold in the secondary market with premium. ROI after exactly 1 year was 14% after taxes.

Is the technical platform self-developed?

Yes, this allows us to add various new features and to fit the needs of both – investors and borrowers. We are not only the peer to peer platform, but also a fully licensed e-money institution. This enables us to operate as an online bank with IBAN account numbers and SEPA MMS payments.

Evaldas RemeikisHow is the company financed? Is it profitable?

The company is financed from shareholder’s equity. It is not profitable yet, but we are in operation for only one and a half year. Our current goal is market penetration and market share.

What were/are the main challenges in the Lithuanian market?

When preparing for the launch, we spent a lot of time carefully analyzing Lithuanian and foreign markets. “Paskolu klubas” shareholders and employees have a lot of experience in the financial sector, we also cooperate with the best partners and agencies. This helped us to be prepared, therefore none of the challenges were unexpected.

One of the more significant challenge was financial literacy. Potential investors were not introduced to peer to peer lending before. Therefore, we started an event and training cycle where we educate investors about pros and cons of peer to peer lending.

You launched the company for residents of Lithuania quite some time ago. What prompted you to open up for international investors and launch an English version of the website right now?

From our experience, we knew that establishing consumer loan brand in a market takes at least a year. We focused our effort on becoming the number one platform in Lithuania for the past 18 months, but had strategic plans to open our platform to international investors from the beginning. Currently we can supply enough of quality loans for international investors.

Another reason was it took time to acquire full e-money license. For this we had to make sure we meet international anti-money laundering requirements and international identification requirements. Only after establishing processes, developing the system and meeting those international requirements we are ready to offer opportunity for international investors.

Which marketing channels do you use to attract investors and borrowers?

For investors, we mostly use educational channels where we try not only to advertise, but also to educate people about investment opportunities. In 2016 we organized over 30 events for our investors. We also use partnership of different financing experts who can provide feedback on our platform and receive bonuses for the investors they bring in.

Moreover, word of mouth perfectly works for us, because we have many satisfied investors, who are sharing their experiences and helping us grow.

For the borrowers, we have fully integrated marketing campaign. We use all traditional and digital channels. We invest in brand building and acquiring quality borrowers. This helps us to acquire valuable borrowers, who are worth to invest in.

Where do you see Paskoluklubas in 3 years?

We see Paskolu klubas as a global player in P2P lending sector. We may establish borrowing sites in other countries, but we will localize it as we did with Paskolu klubas in Lithuania. We see advantages of strong brand in each country we operate for borrowers. We are currently on a path of fast growth and we are not looking to slow it down. Our goal for next few years is to be the number one platform for investors in the Baltic states.

Investors can use the Paskoluklubas referral code P2PBANKING when registering and get 10 Euro for their first investments.

P2P-Banking.com thanks Evaldas Remeikis for the interview.

Interview with the Founders of DoFinance Janis and Viesturs Kulikovoskis

What is DoFinance about?

DoFinance is a P2P platform for private individuals to invest in consumer loans.

We believe in finance for human –  DoFinance aims to become the most user-friendly, secure and accessible P2P lending marketplace possible, so that anyone can participate in seemingly complex processes and become his or her own financial director.

What are the three main advantages for investors?

  • Potential investment risks for investors are well-balanced and brought to minimum: all loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away;
  • You have access to your money at any timeif you decide to withdraw invested money before the due date, you can receive your money starting from 14 to 28 days after your request with (or without) accumulated interest, depending on your chosen investment plan and preferred withdrawal term;
  • Your money never sits still; it is always earning. Auto Invest program on DoFinance reinvests funds the moment the borrower returns the loan and the investor’s money becomes available.

What ROI can investors expect?

Depending on the chosen investment plan, investors earn up to 12% annual return.

DoFinance was founded by the Alfa Finance Group. Can you please describe what Alfa Finance Group does and why it decided to set up the DoFinance marketplace?

The Alfa Finance Group is an online lending and investment management company operating with consumer loans in Poland, Georgia and Indonesia. We are proud that in less than two years – since its launch in 2015 –  the Alfa Finance Group has attracted more than 150,000 registered clients and over €16 million in loans issued as financing loans.

Launching [the] P2P platform is just one of the steps toward expanding the list of available financial services of Alfa Finance Group. Our goal is to continue developing and offer more financial services in the investment management sector.

Janis KulikovskisAccording to the press release Alfa Finance Group has invested 2 million Euro in launching DoFinance. Can you please describe what the money was used for?

The money was invested in technologies to create the platform and in building our loan portfolio.

The best warranty for the safety of investors’ funds, we believe, is effective risk management when it comes to the borrowers thereof big part of the money was invested in developing risk assessment tools that allow us to evaluate borrower’s behavior to detect their willingness to repay as precisely as possible. Our risk assessment tools as well as expertise in risk management permits us to evaluate the behavior of each potential borrower, hence minimizing the risk of failure to repay the loan and making the investment process as safe as possible.

Is the technical platform self-developed?

Yes. The technical platform is built on two pillars – creating a more secure and user-friendly P2P lending platform.  During the development stage, we focused on smart risk assessment and platform that is handy, accessible and easy to use.
We consider customer feedback carefully and, although a lot has been done already, we are still at the very beginning of our journey – the next challenge is to work on the planned improvements.

Viesturs KulikovskisWhat was the greatest challenge so far in the course of launching DoFinance?

Obviously, the fierce competition in the industry challenges us to work faster and bring innovations to the marketplace, but it would be just fair to call it motivation and not challenge.

DoFinance is a marketplace, and it is vital for us to make sure the products we offer are entirely safe.

The greatest challenge was to develop a risk assessment tool that would minimize the risk of failure to repay the loan, be effective and secure. Risk assessment and management is our strength, and all our loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away.

Another challenge was becoming available also to Asian investors. DoFinance is the first European-based P2P lending platform to open customer center in Indonesia, bringing together European customer centered approach and Asian investors. We are happy to be the first ones to offer such individual approach to all our customers and give the chance to Asian investors to invest in Europe.

Which marketing channels do you use to attract investors?

Technology innovations are at the heart of our products hence we mainly use the opportunities digital marketing channels offer. It is a great channel to also reach important players in the industry – opinion leaders, investors, experts etc.

Finance for human stands behind everything we do, which means we look for creative ways to reach our audiences – not only fintech professionals, but also investors without a professional background in financial and investment management. Anybody who is at least 18 years old and holds a bank account can register at DoFinance and, by investing as little as 10 EUR per loan, become his own financial director.

Is DoFinance open to international investors?

Yes, DoFinance is available to private individuals holding a bank account in EU, EEA countries as well as Asian countries which are not included in the lists of high-risk and non-cooperative jurisdictions and international sanctions (Indonesia, Singapore, Vietnam etc.).

What is your opinion on the planned upcoming regulation in Latvia for p2p lending?

It is important that the Ministry of Finance includes industry representatives, when developing regulations on p2p lending platforms. Regulations developed without a throughout understanding of the industry can harm both investors and businesses.

Fintech industry has a potential to become Latvia’s success story which would contribute to both image and prosperity of the country, thus there must be healthy balance between industry regulation and its self-regulation. The entire financial industry and eventually the consumer will benefit from the development of FinTech as banks and FinTech companies will start cooperating when it comes down to providing financial services, customer service etc. Therefore, it is the state’s responsibility to create environment where these companies will stand and where intellectual capacity of labor will increase and taxes will be paid. At the same time, the regulation must ensure transparency and monitoring – simply because then dishonest entrepreneurs wouldn’t be able to harm investors.

Where do you see DoFinance in 3 years?

DoFinance will definitely expand geographically and continue working on developing new financial products for international markets. Our services just became available to Asian investors and now DoFinance looks even further – we don’t want to limit ourselves when it comes to geographical borders.

As we already mentioned, DoFinance is just the first step toward expanding the list of available financial services of the Alfa Finance Group. Most importantly, with every new development we make sure to keep our core principle – finance for human.

P2P-Banking.com thanks Janis Kulikovoskis and Viesturs Kulikovoskis for the interview.

 

International P2P Lending Volumes April 2017

The table lists the loan originations of p2p lending platforms in April. Funding Circle leads ahead of Zopa and Lendinvest. The total volume for the reported marketplaces adds up to 445 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Nucleus.

Milestones reached this month are:

  • Younited Credit crossed 500 million Euro loan volume since launch

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available. UK investors can compare IFISA providers.

p2p lending statistic April 2017
Table: P2P Lending Volumes in April 2017. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Finbee Experiences – My Portfolio Review

A year has passed since I last wrote about the portfolio I built on Finbee. For a detailed description of this Lithuanian p2p lending marketplace see my earlier review. As described there, I invested mostly in the highest risk grade loans (‘D’ loans). Currently I have invested 1,027 Euro in 35 loans. 32 are current (965 Euro), 2 are late (23 Euro) and one is in default (38 Euro), but rates for this loan are paid to me by Finbee’s compensation fund. The average interest rate of my loan parts is 31%. Interim I had grown my portfolio to up to 3,000 Euro invested, but interest rates have decreased due to high investor demand that was not met by comparable growth on the borrower side, so I have withdrawn 2,604 Euro meanwhile.

My results so far

My self calculated yield (XIRR) is 31.5%. This is the highest I achieved on any p2p lending marketplace over a longer duration of time. This includes the 110 Euro capital gain caused by sales of loans on the secondary market with premiums (see my article on trading on Finbee’s secondary market). Calculating the result again, this time with assuming a full write-off of the defaulted loan gives a yield of 29.4%.

Finbee Portfolio
Screenshot of my Finbee dashboard – click to enlarge

There are 19,930 Euro (as of March 13th) in the Finbee Compensation Fund. Current estimate is that the fund is paying about 9,000 Euro per month on defaulted loans and has decreased about 2,000 Euro from February to March. To grow the amount in the Compensation Fund Finbee will need to increase the volume of new loan originations. I looked into the list of open loan requests this morning and there are currently only 3 consumer loans and 2 business loans open for funding.

Finbee recently added business loans to SMEs, but I have not invested in any of these.

Statistic of International P2P Lending Services March 2017

The table lists the loan originations of p2p lending marketplaces in March. Volumes picked up considerably compared to February. Funding Circle continues to lead ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 532 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Lenndy and Credit.fr.

Milestones reached this month are:

  • Mintos crossed 150 million EUR in originations since launch
  • Moneything reached 50 million GBP since inception

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Lending Statistic 03/2017
Table: P2P Lending Volumes in March 2017. Source: own research

Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

International P2P Lending Statistics February 2017

The table lists the loan originations of p2p lending marketplaces in February. For many companies it has been a slow month. Funding Circle continues to lead ahead of Zopa and Ratesetter. The total volume for the reported marketplaces adds up to 408 million Euro. I track the development of p2p lending volumes for many countries. Since I already have most of the data on file I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Klear, Viainvest and Bitbond.

Milestones reached this month are:

  • Funding Circle reaches 2 billion GBP in originations since launch
  • Fellow Finance crosses 100 million EUR since inception
  • Geldvoorelkaar hits 100 million EUR since inception

Investors living in national markets with no or limited selection of local p2p lending services can check this list of international investing on p2p lending services. Investors can also explore how to make use of current p2p lending cashback offers available.

P2P Lendng Statistic 02/2017
Table: P2P Lending Volumes in February 2017. Source: own research
Note that volumes have been converted from local currency to Euro for the purpose of comparison. Some figures are estimates/approximations.
*Prosper and Lending Club no longer publish origination data for the most recent month.

Notice to p2p lending services not listed: Continue reading

Finbee Adds Business Loans

finbee logoP2P 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.

Interview with Eduards Lapkovskis, CEO of VIAINVEST

What is VIAINVEST about?

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.

Eduards Lapkovskis, CEO ViainvestIs 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!

P2P-Banking.com thanks Eduards Lapkovskis for the interview.

Interview with Ivalyo Ivanov, CEO of Iuvo Group

What is Iuvo Group about?

Iuvo is the first South-East European P2P platform that allows its users to buy parts of loans. All loans listed on the platform are issued by originators (registered non-banking financial institutions). We give our users the opportunity to generate an annual return up to 12% on their investments while simultaneously provide our originators with the chance to develop their businesses.

What are the three main advantages for investors?

The most obvious advantages are the high ROI and the buyback guarantee all listed credits have.

Major plus is the reliable originators we have. They go through extensive audits before joining the platform and are required to keep a minimum of 30% of their portfolio – so-called “skin in the game”. Our “skin in the game” requirement is the highest on the P2P market and it is there to better align the interests of the originators with those of our investors.

I might add another serious advantage – we have the biggest and most experienced Bulgarian originator with very clear and refined scoring and lending procedures and more than 10 years experience on the market.

What are the three main advantages for borrowers?

Iuvo is a peer-to-peer marketplace. We don’t lend.

What ROI can investors expect?

The expected annual return depends heavily on the choices our investors make, but the return a well-balanced portfolio should make is on average between 7 and 12%.

Ivaylo Ivanov, CEO Iuvo GroupIs the technical platform self-developed?

Yes, the platform is entirely self-developed and we continue to improve it every day.

How reliable is the credit rating / credit history data available for the Bulgarian loans?

Bulgaria has a very well developed non-banking financial sector and a great deal of experience with consumer loans. The quality of the scoring process is without a doubt on a very high level and there are no reasons to think that would change any time soon. Of course, as I’ve already said, thorough audits are made before we consider any originator joining us.

How is the company financed? Why did you select to start the company in Estonia?

Iuvo is financed through business angels. We chose Estonia as it has been the cradle of P2P lending in the past years and we believe the best way for us to grow and develop is to be where the best platforms are.

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

The greatest challenge we’ve had so far was to educate an audience that has never heard of P2P lending/investing. We’ve worked really hard on gaining awareness and building trust and I’m proud to say we succeeded. The next great challenge we look forward to is providing a user experience that stands out amongst all other platforms.

Which marketing channels do you use to attract investors and borrowers?

We mainly use internet – all the different ad formats and approaches it provides. I find that participating in different forums and events helps tremendously to shorten the distance between us and our investors and I personally believe that the right communication is a mix between technology and personal contact.

Is Iuvo Group open to international investors?

In order to open an account with us individual investors must be at least 18 years old, have a bank account in the European Union (or third countries that are currently considered as having equivalent AML/CFT systems to the EU), and have their identity successfully verified by Iuvo’s back office team.

Where do you see Iuvo Group in 3 years?

I see us as one of the leaders on European P2P lending market. I strongly believe that the potential P2P lending has is yet to be fully achieved and that the industry will surprise us even more with its growth and possibilities. We most definitely will be a part of that.

P2P-Banking.com thanks Ivalyo Ivanov for the interview.