Can you please explain the business model?
Hive5* is a P2P marketplace that offers European investors to invest in group-owned loan originators. The first loan originator on the platform is Ekspres Pozyczka which facilitates short-term payday loans in Poland and business loans directly to the loan originator itself. Soon there will be more opportunities on the way: consumer loans from other European geographies, also different types of business loans – BNPL loans, green loans, estate loans and venture loans.
Why is Hive5 working with fully owned loan originators preferable versus working with external loan originators?
Key reasons why owned LO’s are way more secure than externals:
- Team of carefully pre-selected top rank and impeccable reputation professional management only.
- Corporate governance and complete transparency in front of shareholders, investors and regulators. Full access to regular performance monitoring, business planning and reporting.
- Control over risk appetite. Our polish Loan originator uses a fully automated risk decision engine backed with advanced self-learning analytics performed over the big data pool generated from a comprehensive list of integrations. This solution eliminates the fraud, and human factor and enables us to plan and control acceptable credit risk levels.
- Build and manage significantly increased group equity reserves since owned loan originators contribute the most significant share in returns on investment.
Investors can choose between several p2p lending platforms. Why should they invest in Hive5 rather than any of your competitors? Is there a USP?
Value proposal for investors:
- Higher investment ROI. Until 17-10-2022, the interest rates are increased by +1%.
- Buyback guarantee and skin in the game. Firstly, our Loan originator is obliged to Buyback the loan no later than 60 days after the loan payment due date, even if the loan is late or even if the end-borrower did not repay the loan to the lender. Both loan principal and accrued interest shall be repaid in full. Secondly, all our Hive finance group entities have a corporate policy to allocate at least 10% of equity into the provision funds, which shall be used as a buffer to secure our investors’ funds in case our Loan originator faces some financial difficulties.
- Polish consumer loans. The biggest consumer market in Europe with a stable and growing economy.
Team of professionals only. Secondly, by saying, “we have a team of professionals”, we mean it. For instance, Head of Operations Inga Zubanov? and Head of Marketing and Communications Karolina Staugait? worked at the second largest P2P platform in the EU. Alexey Kalevich, The Chief Technology Officer, worked at an international group of financial companies. Regarding our first loan originator, “Ekspres Pozyczka “, – all the team members have great expertise in top finance companies. For example, before “Ekspres Pozyczka”, CEO Wojtek Homan was an executive at “Provident Finance”. We love what we do.
You are planning to expand the lending operations into different markets. Which are these, and what criteria do you apply to select these markets?
Diversification and global scale
Finally, as every educated investor knows, the necessity of diversification; soon, investors could experience broad diversification on one platform by investing in many different types of loans. Thus, we will relentlessly diversify within two mainstreams:
1) Geographic: “hive5” will phase its expansion into three continents: Europe, Africa and Asia.
2) Products: we have launched the platform by allowing investors to choose from consumer and business loans. That is only the beginning; soon enough, we will introduce many more secured business lending products, such as Green (or sustainable) loans, Equipment leasing, Sustainable Estate loans and BNPL powered by e-commerce.
Our target EU countries with at least 10 million inhabitants.
The p2p lending platform is currently registered in Croatia. How do you see the regulatory aspects of the way forward?
The next step in our licensing roadmap is to receive updated and clearly defined ECSP regulatory framework guidelines, which the European Commission shall announce in November this year. Based on those guidelines, we will start application preparation for the single licence “passporting” procedure allowing the provision of crowdfunding services in the European Union and European Economic Area (EU/EAA).
We will keep you and all our investors constantly updated on this matter, as we consider it a solid extra mile of trust in front of our investors.
What’s your view on the economic outlook in Europe, especially regarding the countries your loan originators operate in?
In contrast to other EU countries, the economic outlook of 38 million populated Poland looks much brighter from a consumer lending perspective, even in these high inflation times. Firstly, Poland is one of the largest and fastest-growing EU economies with constantly rising purchasing power per capita. This means that before entering a turbulent economic cycle, this country and its consumers have accumulated much more buffer to absorb the downturns than the others. On top, very shortly, we will see traditional banks getting even more conservative against their current customers, which will instantly build an extra market of former prime customers. Needless to say, war refugees from neighbouring Ukraine instantly fill in the gaps in the workforce and contribute to local consumption. For us, the following months mean a heavy focus on controlling default rates when using our precision scoring engine; in simple words – more population to be scored before credit approval with adjusted risk tolerance levels.
What plans are on Hive5’s roadmap for the next six months?
Main KPI of Hive5* – at least 1000 active investors and 3 million EUR of the total loan portfolio by the end of this year.
Also, we will keep the promise to offer diversification on our platform. By now, investors can invest in consumer and business loans from Poland. Soon there will be more opportunities on the way: consumer loans from other European geographies, also different types of business loans – green loans, estate loans, BNPL and venture loans.
To make our platform stand out from a UX/UI perspective, we plan to implement more advanced and user-friendly features in the marketplace.
P2P-Banking.com thanks Ri?ardas Vandzinskas for the interview.