Lithuania Will Regulate P2P Lending Starting February 1st, 2016

Lithuania will regulate p2p consumer lending starting February 1st, 2016.

The main requirements introduced by the new legislation in Lithuania are:

  • 40K Euro of share capital required by the marketplace company,
  • contingency plan in case of failure of the platform,
  • limitation of 500 Euro investment per one loan,
  • limitation of 5,000 Euros investment per platform for ‘inexperienced’ investors,
  • marketplaces will be allowed to gain their revenue only from monthly instalments paid by borrowers. This means that all platforms will not gain revenue if their portfolio is not performing.

Laimonas Noreika, CEO of Lithuanian p2p lending company Finbee told P2P-Banking.com: ‘Once again Lithuania proved itself as a country with strict financial regulation. [The] new law gives more transparency to all – lenders, platform owners and public authorities. FinBee welcomes the regulation and invites international lenders to discover Lithuania as a country open for P2P lending.Continue reading

Interview with Laimonas Noreika, CEO of Finbee

Laimonas Noreika is the CEO of Finbee, a p2p lending service that launched last week and is open to international investors starting today.

What is Finbee about?

FinBee is about borrowing for less and earning more when investing. We also are most user friendly p2p lending platform in Lithuania.

What are the three main advantages for investors?

Firstly, our loans have high interest rate – from 10 to 40 percent. That means, that investor can expect higher return of investment, compared to other p2p lending platforms. Secondly, we have reliable software, that is developed by UK based Madiston. That means, that it is tested and extremely user friendly from day one. And finally, we pay great attention to selection of borrowers, so that the risk for investors is minimized as much as possible. On top of that, we invest 10 percent on total sum into each and every loan, so we share the risk with investors. In the near future we also will introduce compensation fund that in an unlikely case of borrower defaulting on its loan will compensate lenders their investment.

What are the three main advantages for borrowers?

I would say that first and foremost, we offer cheaper loans than most of the players in Lithuanian market, including banks, payday loan companies and credit unions. This is achieved by implementing auction principle when borrowing. That means, that borrower can set interest rate ceiling, for example 15 percent. Lenders then are able to offer lower interest rate, therefore making loan interest rate for the borrower as little as 12 or 13 percent. This is free market at its finest, when the market sets the real interest rate for the benefit of the borrower. Secondly, we are very consumer friendly. We talk, look like and do our business like majority of our clients. We know, what they want and we are doing our best to meet those expectations. Lastly, we have a fair commission policy. That means that if borrower has high credit rating, our commission is lower.

What ROI can investors expect?

Laimonas NoreikaItβ€˜s all up to investors. Loan interest rate will be between 10 and 40 percent, therefore investors can decide for themselves if they want lower risk and lower potential ROI or higher risk with possibility of higher potential ROI.

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

FinBee started little over a year ago, when I quit my position as a CMO in one Lithuanian company and started everything from scratch: examining the market, getting know-how, attracting investors and partners, picking up experienced team members. Big breakthrough moment was when Madiston became our partner and we got a technological edge against our local competitors

Is the technical platform self-developed?

No, software is provided by Madiston, whose Tim Simon is also member of FinBee board. Tim has an extensive experience of delivering successful applications to the Financial Technology marketplace as a founder and CEO of Quotient plc and Mondas plc, listed on the London Stock Exchange and AIM respectively. Continue reading