P2P Lending Service Isepankur Opens To Borrowers In Finland

Estonian p2p lending service Isepankur announced today that it now offers p2p loans to borrowers from Finland. Isepankur already opened to lenders from multiple markets last year. Now Isepankur adds Finland as the first foreign market executing the expansion strategy on the borrower side.

Here is an excerpt of the announcement made today:

Dear customer,

We have taken the next step towards building a pan-European credit platform so you could continue enjoying a great return on your money. We have now also started accepting loan applications from Finnish residents side-by-side with existing Estonian borrowers. We will offer one of the best rates in the market whilst trying to deliver a great return to our international and local investors all in one single platform.

Finnish market offers an opportunity to diversify your portfolio and better manager your returns. Here are some key facts about Finland which you might not have known:

Population: 5.4 million; 67% live in towns or urban areas, 33% in rural areas
Monthly wages: average 3,040 €; men 3,352 €, women 2,735 € (2010)
Internet users: 85,3% of the population internet (ITU, June,2010)
A number of payday loan providers has grown rapidly in recent years pushing up the interest rates up to 50% per annum. Lack of competition in the consumer lending and banking market means that even low risk customers typically pay above 20% per annum.
Situated: Northern Europe, neighbouring Sweden, Norway, Estonia and Russia

We believe that there is a big potential for isePankur on the Finnish market as most of the competition consists of unethical and unsustainable loan providers. We are sure that investors will find new attractive investments opportunities with solid returns. Please be aware that it might take a couple of weeks for the Finnish investment opportunities to appear on the market. We will soon also allow you to add market-specific configurations to your investment profiles.

Isepankur Launches International Peer To Peer Lending

The Estonian p2p lending service Isepankur recently opened up to international lenders. Anyone with a bank account in the European Union or Switzerland can now start lending at Isepankur. Borrowing is still restricted to residents and businesses in Estonia (due to regulation reasons). I expected cross-border lending to be happening in peer to peer lending as early as 2008 (see my predictions). As it turned out it took 4 more years since my blog post for cross border lending to happen.

Isepankur is in operation since 2009 and has a good performance track record since.

Screenshot from the statistics section. The realised returns (after bad debt) show that most of those investors, who lent more than 5,000 Euro, fall into the range of 10 to 20% p.a.

Advantages and disadvantages for (international) lenders:

  • no lender fees
  • higher interest rate level in Estonia (compared to other European markets)
  • fast money transfer (SEPA bank transfers usually take only one working day and do not cost more than national transfers) – therefore getting money in and out is fast
  • lots of information about the borrowers (employment&income verification, information on other existing debts of borrower)
  • low bad debt in relation to interest rates
  • low minimum bid allows wide diversification
  • stringent debt recovery process
  • detailed statistics (>2 years track record) and account performance overview
  • high security standards
  • not that many loan listings. It takes lenders some time to built a large portfolio

Advantages and disadvantages for borrowers:

  • application can be completed totally online (no paperwork, borrowers even submit bank account records digitally)
  • moderate fees
  • fast funding with short auction duration; money accessible within two hours of auction (successfully) closing
  • currently the interest level is very high; this might get better if Isepankur succeeds in getting more lenders

I will publish an in depth review article showing step by step how I tested investing at Isepankur. Look out for this article containing screenshots showing the features and interface in the next days on this blog.