Chief Executive Officer (CEO) of the Lendermarket platform, Endrik Eller has initiated an ambitious development business plan since he took up his new position.
On investors’ side, Lendermarket has strongly targeted new markets like France by offering them a dedicated interface several months ago.
On the loan originators’ side, new players have been added to reinforce investments proposed by Creditstar, providing a good portion of geographic diversification.
This development plan was initiated in a post-pandemic inflationary economic context and in parallel with an ambitious growth strategy of the Creditstar Group requiring significant liquidity.
It was more than time to ask Endrik some questions (10 in total) about the present and future of the Lendermarket platform :
1. Although introduced and used in 2020, the extensions have been kept at a very low level in 2021 and the beginning of 2022. Can you explain why they increased so much starting in 2022 ?
We have noticed an increase in extensions from Creditstar Group in recent months, especially in the Spanish and Polish markets. Considering the macroeconomic picture in Europe, there are a lot of factors that affect the repayment quality of these borrowers.
Short-term loans with higher interest rates are being issued to individuals who are usually underserved by traditional banking institutions and might have less cash reserved at times of increased uncertainty and high inflation.
Lending companies may also adapt their debt management processes taking into account the most recent economic trends. Loan Originators can proactively offer restructuring plans and extensions to borrowers who might be potentially late with payments.
This debt management approach helps lending companies reduce the ratio of late portfolios and avoid placing borrowers into default.
In most cases, working with borrowers who are likely to be late ends in the best recovery position for the lender rather than kicking off a debt collection process.
Extensions aside, it’s important to note that the default rate from Creditstar Group is at 0% and they have always exercised their buy-back guarantee promise. It’s also worth noting that Creditstar Group has shown significant growth to date along with profitable operations.
I’m also happy to share that the Lendermarket team is currently focused on adding further transparency to the platform.
We have added further financial monitoring activities for all of our Loan Originators and are hoping to publish the result during H1 2023. We have also recently welcomed our fourth Loan Originator, increasing the diversification of short-term loans on our platform.
2. To what extent has Lendermarket adapted its business strategy given the inflationary surges observed around the world ?
We understand that high inflation does not cultivate optimism but we believe now is a better time than ever to invest in P2P and protect your savings against record-high inflation.
We work closely with our lending partners and when demand for financing increases, we are able to offer higher than usual interest rates.
As a business, we do not see a negative impact on our operations given the current market conditions. We continue to observe high funding volumes and increased investor activity.
3. Although Creditstar has been profitable for more than 15 years in a row, with a net profit approaching 9M€ in 2022, investors focus on their delayed loans (average of 80%). When do you plan to reach your target of 20% late loans ?
We are currently working on a repayment plan with Creditstar and introducing additional controls for all Loan Originators on the platform.
Note from Just-P2P :
A number of investors regularly raise concerns about the level of repayment of Creditstar’s bonds. But as there is very little reliable, summary information available on this question, I decided to make my own factual opinion.
Reason why I created a dedicated follow-up system over the time that allows me to monitor the evolution of the payment obligations for the Creditstar group.
4. What processes and criteria are used to set interest rates on the platform ?
Taking into account the conditions and economic situation of the country they operate in, every loan originator decides what interest rate they offer to Lendermarket’s investors, we are not involved in the decision process.
5. Lendermarket has seasonal promotional campaigns but unlike other platforms, no loyalty program is offered to investors. For what reason(s) ?
During Q4 2022, Lendermarket’s team launched a beta loyalty program for a select group of investors.
We are currently testing the feature and hopefully, it will be public for more investors soon, so they will have the chance to increase their average annual returns through this feature.
6. Don’t you think that proposing a new Peruvian loan originator in January 2023 while a coup attempt took place in December 2022 can harm the image of Lendermarket ?
When onboarding a new loan originator on the platform, we start the due diligence process long before the company is fully onboarded and available for our investors. With that in mind, we cannot predict the economic environment of a country months in advance.
The exposure to this particular loan originator on the platform is currently 50,000€ on loans, so it’s not a big risk. We as a multi-lending platform, always try to spread our exposure between all our loan originators and this will remain to be our strategy and focus for the coming years.
7. For several weeks now, investors have been complaining about the slowness of the platform (which seems to have started with the introduction of the app. in the URL). What are you going to do about it ?
To provide investors with a better online experience, we are developing a new platform. Its immediate goal is to resolve its current platform’s performance issues. As a result, investors will soon be able to access account statements and pages faster and more reliably.
With our new platform, we are advancing towards technology that supports an improved product (including financial monitoring activities and faster onboarding of new Loan Originators), new features, and faster deployments.
8. Recently, Lendermarket has introduced new loan originators located outside the European borders: Quickcheck (Nigeria) and CrediFace (Peru). Are there any plans to introduce other loan originators in 2023 ?
As part of our platform expansion, we aim to increase the number of loan originators so that investors can diversify their portfolios according to their preferences.
There are currently a number of due diligence processes active (including assessing the underwriting and collection processes applied to applications and borrowers).
So far we have onboarded three loan originators since last year and are planning to keep onboarding more partners during the new year.
9. You planned to launch the secondary market last year in 2023. Is it still on track ?
Yes, we are still planning to introduce a secondary market to the platform. Nevertheless, as I mentioned previously, we are currently developing a new platform, so the secondary market will be introduced once the new platform is up and running.
9. What do you think differentiates Lendermarket from other platforms in Europe and what are your development axes for the next 5 years ?
Differentiators :
- Higher interest rates
- Plain processes and UX/UI
- Faster customer service
- Carefully selected loan originators
- Well-functioning auto-invest function available for passive investments
Upcoming plans :
- A New Platform is on the way
- More Loan Originators
- Secondary Market
- Crowdfunding licence application
I hope this interview with Lendermarket’s CEO has given you some answers to your questions and helped you discover what the platform has in store for us this year.
Your questions in the comments are welcome.
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