Lendify challenges Swedish banks with the country’s first real P2P-lending platform
Lendify is the first real P2P-lending platform on the Swedish market. With €2 million in new equity funding the company now begins its quest to transform the Swedish loan market.
The concept is called peer-to-peer lending or in short P2P lending. People looking for investments with a good risk/return are put in contact with people looking for loans with good interest rates. Lendify handles the servicing of loans on behalf of the matched borrowers and lenders through its web based plattform. A meticulous and innovative credit scoring model, using traditional and new data sources in a highly structured and analytical manner, is at the core of Lendify. Sweden, a country famous for its early adopters when it comes to the web, has been lagging behind many other countries on the P2P lending scene. But now, Lendify promises to bring the Swedish market up to speed. By using an entirely web based structure an minimising many of the costs that traditional financial institutions (banks and other traditional borrowers) have to bear, Lendify is able to provide great rates for borrowers and attractive returns for investors.
Strives to create a better and more effective loan market
“If you compare the banks ́ loan spreads to the credit risk for personal loans in Sweden, it’s clear that they charge their customers to much, especially on on unsecured consumer loans. Swedes are among the best in the world at repaying their loans and despite high fixed costs and capital requirements the banks ́ profit are larger than ever. We feel that it ́s time for the Swedish lending market to become more transparent and effective with the use of technology” Says Nicholas Sundén-Cullberg, CIO and one of the founders at Lendify.
Following a soft launch in September 2014, borrowers can get loans of between SEK 5000 and SEK 350.000 (€520-€36.000) without a collateral and get an effective interest rate between 5-15%. The interest rate is individually set and aims to give a fair reflection of the borrowers ability to repay the loan.
Part of a larger international trend
Peer-to-peer lending is part of “the sharing economy” where technology provides cost benefits, transparency and better conditions for the consumers, by bringing people together to benefit through each other.
“The sharing economy has gained traction fast in Sweden with services like Uber and Airbnb quickly becoming mainstream solutions replacing old imperfect systems. We looked at how peer-to-peer lending has improved the market in UK and the US and thought, why not here?” says Peter Schierenbeck, CMO and one of the founders at Lendify.
A marketplace for peer-to-peer lending
Lendify is a marketplace for peer-to-peer lending, a platform where borrowers and investors can meet on mutually beneficial terms. Our digital structure makes it possible to eliminate the banks’ intermediary role and keep costs at a minimum. The result is more attractive rates for both borrowers and investors.
Borrowers can apply for a loan of up to SEK350, 000 to use for any purpose with an effective interest rate starting at 4.90%. The investors, i.e. the lenders, choose which loans they wish to invest in and receive fair returns as borrowers amortize and pay interest on their loans each month. Lenders can invest as little as SEK250 and reduce their risk by investing in several different loans. Both borrowers and investors are anonymous. Lendify handles credit risk assessment, payment processing and reminders through its automated system.
About peer-to-peer lending
Peer-to-peer lending goes by many names. It is also called marketplace lending, social lending, person-to-person lending, or simply P2P lending. It can be defined in this simple way: individuals lending money to other individuals without a banking intermediary.