P2P-Banking.com Interview with Laimonas Noreika, CEO of Finbee
You launched Finbee a year ago. Can you sum up the major developments since?
More than 3,000 investors have issued 2M EUR worth of loans via FinBee and none of them lost any money due to a default and our compensation scheme. We are very proud for this result. We have a reliable and highly skilled team that has built a company that is constantly growing. We are in full legal compliance with existing regulation and are constantly working on developing new products and features for our investors and borrowers.
What were the biggest challenges in this first year?
P2P lending is a relatively new concept in Lithuanian lending market, so raising awareness and overcoming scepticism was one the biggest challenges that we’ve faced from day one. Also, when we started to expand, building a team that can deliver results while maintaining highest standards was also time consuming. From technical perspective, learning the dynamics of supply and demand in FinBee auction was also something that we put a lot of effort to.
In your opinion, which 3 most important skills does a CEO need to successfully lead a fintech startup?
In my personal opinion, a key feature that a CEO has to be experienced in is team building. Even the most outstanding CEO will not be able to achieve much without a great team. A great manager has to have a diverse experience in corporate governance, finance, legal matters, marketing and IT. Also, I would like to emphasise, that simple and transparent communication is vital for a CEO.
Are collection and default figures in line with the expectations & projections you had a year ago?
Current default figures are better that we expected and projected. We expected to operate with 8 to 10 percent of non-performing loans. Currently we have 2.25 percent (it worth noting that we consider a loan to be non-performing when two monthly instalments are missed, that is when loan is 60+ days late). We also project 40 percent recovery of non-performing loans. So we expect 4.8 – 6 percent losses after recovery. Having in mind that investors now invest on 26 percent interest rate on average, they can expect 20 percent returns even without our compensation fund.
We achieve this by minimizing the chance of default with wide range of measures. For example, we check every single borrower using more criteria than is required by regulation. Also, we meet each and every one of them personally. We confirm only 7 percent of loan requests and only then pass them to the investors.
What are the issues that investors and/or borrowers most commonly have and want improved?
There is no such thing as total perfection in our line of business, so we also have a quite a few things to improve. I would say that user experience of the platform is the key issue for FinBee at the moment. All other aspects don’t get criticism in FinBee as we have low default rates and high investor’s returns. We do regular customer satisfaction surveys and it is rewarding to receive feedback from our investors to not change a thing.
What plans and goals do you have for FinBee for the next year?
Operations in Czech republic (we already have a local team, still working on credit scoring, expect to start till the end of this year), business lending in Lithuania (all prepared, waiting for new law), e-money licence (we plan to receive it in a few months).
Talking numbers, our target is 5M loans issued, zero losses for investors and more than 20% investors return.