The European peer-to-peer lending market has grown exponentially over the past few years. For investors based on the continent and looking to make investments in EUR there’s a great variety of options, but many find it difficult to know where to start. When you look at the European market as a whole, certain regional clusters of expertise appear to have begun to take shape.
1. Latvia
Latvia has built a name for itself in the alternative finance world and is home a number of well-known platforms like VIAINVEST, Mintos, Twino, and Viventor. Statista value the Latvian Fintech market at $878 million and predict an impressive 22.8% annual growth. While the regulation of peer-to-peer lending in Latvia is still being developed, the industry is supervised by the State Revenue Service and the Consumer Rights Protection Centre of the Republic of Latvia.
VIAINVEST
VIAINVEST is a peer-to-peer lending platform offering to invest in short-term consumer loans as well as installment loans, all secured with a Buyback Guarantee. As VIAINVEST is a part of VIA SMS Group it offers unique investment portfolio originated by VIA SMS Group daughter companies – consumer lenders operating across Europe. The VIA SMS group has been operating since 2008 and launched VIAINVEST in late 2016. Within just 5 months of operations, VIAINVEST has reached the milestone of 5 million EUR of loans funded and is growing rapidly.
Mintos
According to the published statistics, investors from 50 different countries now lend their money through the Latvian platform Mintos. Launched in 2015, Mintos offers financing via loan originators for things like cars, mortgages, invoice financing and personal loans.
Through its loan originators, Mintos allows investors to spread their capital across a diversified portfolio of loan types and geographical areas. They also have Buyback Guarantees on some of the loans, where the loan provider pays the principal and interest once the loan is 60 days overdue.
Twino
Twino specialize in unsecured consumer loans in countries like Poland, Georgia, Denmark, and Russia. Twino were originally known as Finabay and launched the peer-to-peer lending site in 2015. Twino offers a Buyback Guarantee on some of the loans, which covers the interest and principal if the borrower is over 30 days late. Twino is run by CEO Jevgenijs Kazanins, who was previously in charge of marketing at the Estonian P2P lender Bondora (more info below).
Viventor
Viventor lets investors choose from secured loans which have already been selected and pre funded by listed lenders. The majority of the loans are to consumers, but the wider loan-book also holds a number of mortgage-backed loans (currently around 4.4% of all lending).
2. Estonia
Like its Baltic neighbors, Estonia also has become a fintech hub and has played a part in the creation of some well-known success stories. The software for the ubiquitous communication tool Skype was built by Estonians. Transferwise, one of Europe’s most famous ‘unicorns’ (a start-up valued at more than $1bn) was also founded by an Estonian duo. The Estonian government is working hard to attract businesses with technical initiatives like the e-residency. The government also provides regulation for peer-to-peer through the Estonian Financial Supervision Authority (FSA) which helps to foster a healthy regulatory environment.
Bondora
Bondora is the largest Estonian peer-to-peer lending platform according to the Altfi Loan Origination Index with over €87 million in loans to date. They provide finance on unsecured consumer loans. They were founded as isePankur in 2008 and now offers investors the chance to fund loans to borrowers in France, Estonia, Slovakia and Spain. Bondora has been operating since 2009.
EstateGuru
EstateGuru provides secured loans against properties, with investments from €50 on each new loan. Many of the loans are on properties and land in Estonia and Latvia with a maximum loan-to-value of 75%. EstateGuru was founded by Marek Pärtel in 2013, who came from a background in real estate investment management.
3. Lithuania
Lithuania has a number of peer-to-peer lending sites which are supervised by the Bank of Lithuania. Among the more established Lithuanian platforms are Savy and FinBee. Savy works a bit differently to other European P2P lending platforms as it allows lenders to give money directly to borrowers via a Paysera account. FinBee offer consumer and business loans with a compensation fund to cover missed interest payments where funds are available.
4. France
The French P2P lending platform Younited Credit is continental Europe’s largest P2P site by loan origination. Formally known as Prêt d’Union, they’ve expanded into Italy with a dedicated Italian website but are yet to launch in other European countries. France is also home to Unilend, Lendix (both business lending) and Finexkap (invoice financing).
5. Germany
Auxmoney is Germany’s largest peer-to-peer lending platform, with over €430 million in all time loans since its launch in 2007. Auxmoney now has over 2 million members. They’ve raised a huge amount of external investment too, with a €150 million boost from Dutch private equity group Aegon Capital Management back in 2015, among others.
Summary
The largest continental European peer-to-peer lending platforms are Younited Credit in France and Auxmoney in Germany. Between them, they are approaching a billion euros in all time investment, and are largely focused on their domestic markets.
The Baltic and Nordic countries have a wider range of platforms like Bondora, Mintos and ViaInvest. Many of these are outward looking platforms with websites in English who are actively reaching out to attract investors across Europe.
