israel

BLender Begins International Expansion and Offers Cross-Border Peer-to-Peer Lending

wiseclerk 2 Comments

Blender LogoBLender, a p2p lending company from Israel, today announced its global expansion, beginning with new offices in Milan, Italy and Vilnius, Lithuania that will serve customers in Italy and the Baltics. The Israeli-based company delivers a P2P lending platform with a proprietary consumer credit rating system designed for territories without credit bureaus or traditional consumer credit information. BLender is a cloud-based platform that was built to work in a wide range of markets and languages.

In Italy the platform charges borrowers a 4.5% origination fee and investors 1.5% of each repayment (principal and repayment). Compared to other marketplaces these fees are in the higher price range. The fee for selling a loan on the secondary market is 0.45%.

BLender has experienced exponential growth since its launch in 2014 and has already provided approximately 12 million USD in loans. The company will continue expanding its global operations into territories that are craving consumer credit. In 2017, BLender plans to launch operations in Africa, Latin America and other European Union (EU) countries.

“Offering multi-national P2P lending has been our vision since BLender’s establishment,” said Dr. Gal Aviv, CEO, BLender. “Since our Israeli launch in 2014, we have built the foundation, infrastructure and technology to enable BLender to operate in the global market, so we will be able to face operating, cultural, technological, regulatory and taxation challenges.”

With the expansion into Italy and the Baltics, BLender is enabling users to lend and/or borrow across countries, making financial borders a thing of a the past, says the service.

“BLender identified a credit gap in countries where the supply of consumer credit is insufficient for the populations’ needs and is priced very high, and a gap in other countries where the savings options have very low or even negative yield,” said David Blumberg, founder and managing partner, Blumberg Capital, a San Francisco-based venture capital firm that led BLender’s last funding round. “BLender’s multi-national lending options mediate this credit gap by creating a meeting ground between borrowers from countries that lack consumer credit, to lenders from countries where the yield on their savings in insufficient. We support and strongly believe in the vision, management capabilities and business potential of the BLender team.”

Investors on the BLender platform will earn predicted interest rates of 5-6% annually. The safeguard fund acts as an additional layer of protection to the lenders in case of a default. BLender’s default rate is approximately 1% before activating the safeguard fund. Thanks to the SafeGuard fund, the effective default rate is 0% says the service. BLender also offers ReBlendTM, BLender’s secondary market that offers the lenders the option the trade their loan portfolios and enjoy liquidity.

Recently BLender was chosen to participate in the exclusive ELITE program of the UK Stock Exchange that finds and nurtures companies with the potential for an IPO. As part of the program, BLender receives the guidance of the program’s experts for two years that help promote the company’s activity.

Furthermore, the company was selected as one of the most promising Fin-Tech companies in the world for 2015 by the accounting firm – KPMG, and also by the United Kingdom Trade and Investment Department.

The multi-national expansion was done in collaboration with KPMG.

BLender's founders
BLender’s founders

Interview with Eyal Elhayany, CEO of Tarya

wiseclerk

What is Tarya about?

TARYA is the largest Israeli P2P lending platform built from the ground up, whose aim is to provide an online (24/7), financially beneficial experience for both borrowers and lenders. At the foundation of the platform is an advanced credit-scoring model relying on big data underwriting algorithms based on fraud prevention procedures

The platform founders have previously worked in both technology and regulation, and observing the state of the economic environment – local and global events and trends, we sense that conditions are ripe for fresh, more beneficial financial offerings to be accepted by the general public.

TARYA is headed by experts in fraud prevention technology and regulation, and has become a major player in the Israeli Crowdfunding transformation in order to supply consumer credit without bias. We are tackling regulatory, business and cultural challenges and – being the leading company – are excited and satisfied of the progress made so far.

What are the three main advantages for investors?

Diversification, diversification and diversification. The key to successful investments in P2P is diversifying the investor’s portfolio by offering:

  1. Automated Investing and Reinvesting – the Investor defines risk and return preferences, while the platforms algorithm allows for a hands-free experience.
  2. Varied borrower types – TARYA continues to develop partnerships with employers and social projects across the nation, thus providing both solid and risky borrowers, from different sectors of the Israeli economy.
  3. Low minimum participation amount in loans – The minimum amount for investing in a loan starts at only 50 NIS (equivalent to 10 Euro).

What are the three main advantages for borrowers?

TARYA being an online financial service, provides borrowers an efficient and up-to-date approach for loan application:

  1. Transparency – The process is performed online, without having to “wait-in-line” at the bank. Payments, interest rates and terms are presented up-front with an emphasis on “consumer protection”.
  2. A FinTech Experience – TARYA is a unique and pioneering initiative that facilitates the direct connection between borrowers and lenders, using an online platform. This platform bypasses existing credit entities – banks and credit card companies, and allows borrowers to obtain credit at significantly lower costs. Interest rates range from 3.5%-8.0% depending on the borrower’s credit rank. Of note, non-banking (credit cards) interest rates for borrowers average 11%.
  3. Business Partnerships – TARYA’s unique model grants upgraded loan terms for borrowers whose personal details are authenticated by their employers. This practice benefits all employees of the organization, who can receive loans at rates above their personal credit rating.

eyal-elhayanyWhat ROI can investors expect?

Lenders investing in diversified and micro-financed portfolios average between 5%-6% returns after fees. Lenders pay a fee of 1.0% on returns.

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

We believe the venture has the potential to change the structure of the credit market in Israel: It is widely accepted that the Israeli banking sector is concentrated and not competitive, especially in regard to the household and small businesses sectors. Since setting up shop in May 2014, TARYA has been growing in borrowers, lenders and partner organizations.

TARYA is funded by private equity. Since establishment, we’ve received several applications from VC and institutional investors.

Is the technical platform self-developed?

The platform is developed internally, built from the ground up with underwriting and credit rating processes that combine banking know-how, statistical modeling and technology professionals with extensive expertise in online fraud and information collection from social networks and other sources.

The diverse expertise of our team and the advanced technology is giving us a competitive advantage and will enable us to confront upcoming challenges head on. Continue reading →