Weekly industry news roundup – March 27, 2017

Around the world

Seeking Alpha published an article from the International Monetary Fund. The authors explored the underpinnings of the fintech revolution. Many, including the IMF, see P2P lending at the fore of this sweeping change. Speed and low costs are influencing more people to embrace theses digital solutions.

Crowdfund Insider reported on findings from online lending analytics firm OFF3R indicating that lending activity in the UK has increased in recent months. Moreover, the long-term trend is strong given that “Early data from March appears to suggest that this momentum will continue for the equity crowdfunding sector.” While the information pertains to the UK market the data indicates strength in the broader industry.

Entrepreneur offered 6 tips for navigating online lending for small businesses. Their article comes amid findings from The Harvard Business Review showing that although “the total volume of small-business bank loans decreased by 3.1 percent in 2014, small-business online lending increased twofold.” The author cites costs, and quality as areas to consider.

Reuters explored the ways in which traditional banks are seeking to increase speed to compete with the growing online lending industry. Credit bureaus like Experian are attempting to leverage technology to drive down the time required for underwriting loans.

CXOToday discussed ways in which fintech solutions like P2P lending are disrupting the lending market in underbanked regions like India. The author discusses how a “cost advantage also helps P2P lenders to offer better prices as compared to banks.” These emerging markets have become areas of accelerated growth for P2P lending.

Bondora mentions

ArticStartup praised Bondora citing that we “turned to profit late last year after focusing again on its original offering of consumer loans.” Pärtel, our CEO, reflected, “By mid-2016 we understood that our focus has to be on what we started from – a faster and cheaper consumer loan product. And we understood that on the investment side it has to be an online product for the people, not so much for the banks or funds.”

Weekly industry news roundup – March 20, 2017

Around the world

Forbes published an article exploring how the marketplace lending phenomenon is spreading worldwide. Technology which enables faster decisions for borrowers and stronger returns for investors has earned appeal from the burgeoning Asian market. The author explains that “Over the last 5-10 years, China, India, and Southeast Asia have leapfrogged from a cash-based society,” she continues, “it’s a prime market for alternative lenders.”

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The Motley Fool offered readers a brief guide of questions to ask oneself before borrowing from a P2P lending site. The author suggests potential borrowers consider the interest rates, eligibility and fees. These are all critical aspects to becoming comfortable with the borrowing process outside the realm of a traditional bank.

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Business Insider took a look at the areas of FinTech poised for continued growth through 2017. Crowdfunding and alternative lending all ranked in the top ten. Sources like Startup Boot Camp and PwC illustrate that both are primed to maintain their growth relative to 2016. The author posited that newcomers to the P2P world will endeavor to improve existing systems.

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The Times explored the ways investors are seeking more aggressive growth from their investments amid lower interest rates in traditional banking products. Rather than just maintaining savings, more people are discovering that they can generate respectable returns with managed risk in marketplace lending.

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Crowdfund Insider released an article reviewing new measures from The Bank of England Fintech Accelerator. The organization is working to bridge the divide between innovative, ‘disruptive’ FinTech firms and traditional banks. The idea is to create an environment more conducive to creativity in the financial space. These partnerships mirror the trend of banks seeking to adopt marketplace lending systems.

Weekly industry news roundup – March 13, 2017

Around the world

Yahoo Finance posted an article discussing the growing membership of the Marketplace Lending Association. This trade association, formed in 2016, seeks to advance the marketplace lending world through the development of transparency, efficiency and consumer-based solutions. In recent years the association has provided a foundation of legitimacy for various P2P networks.

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PYMNTS published an article announcing the introduction of blockchain technology into marketplace lending. The relatively new technology of secured, digital ledgers has helped alternative currencies like Bitcoin reach the masses. Now, some marketplace lenders are exploring how they can use the same technology to bolster P2P platforms.

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Forbes generated a piece discussing the prominence of marketplace lending in our digital world and the advantages of the industry. The author explains “In 10 short years, P2P lending has facilitated over $35 billion of loans in the US.” However, there is still plenty of room for this young arena to grow. “Loans made through P2P platforms currently account for just 3% of the total unsecured consumer loans in the US,” offers the author.

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CIO offered a brief review of how marketplace lenders are continuing to influence the future plans of conventional banks because, “In order to retain and keep wallet share, banks and financial must rethink the future of service delivery that they currently offer, in a way that transcends new technology adoption.” Moreover digital solutions like marketplace platforms can adjust faster than brick and mortar businesses.

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Gadget discussed the emergence of P2P firms in countries like Africa. Specifically, “Kenya and South Africa are the market leaders, raising $16.7 million and $15 million respectively from online channels in 2015.” The country has many citizens who are dissatisfied with traditional lenders and therefore, are turning to the speed and affordability of online solutions.

Weekly industry news roundup – March 6, 2017

Around the world

Times Leader published an article citing the growing interest among major financial firms to create their own marketplace lending businesses. Major players in the world of finance recognize the value of peer-to-peer lending as an alternative to conventional banking. Ironically, the entrance of global firms into marketplace lending resembles the traditional banking model that P2P investing distances itself from.

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Crowdfund Insider shared news of Orchard’s release of Q4, 2016 marketplace lending data. Orchard is a firm which seeks to aggregate the performance of numerous P2P lenders. These analytics empower investors to make informed decisions in an effort to get the best return for their capital. Overall, originations are on the rise.

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Tech Node discussed emerging marketplace regulations in China. The China Banking Regulatory Commission published an outline of rules designed to create a more sustainable framework around P2P investing. The three major components dictate that (1) funds invested must be deposited into commercial banks, (2) account reconciliations must be approved by the debtor and creditor and (3) firms must keep records of all lending.

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Growth Business took a look at how marketplace lending is upending the old fashioned process of working through a bank for loan approval. “Crowdfunding could be worth more than £12 billion in less than ten years, assuming that demand for investors and innovative start-ups continue to grow,” remarked the author. Moreover, the author posits that increased transparency will boost investor’s commitment to the technology.

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The Federal Reserve Bank of San Francisco cited peer-to-peer lending as one of “5 Fintech Trends Shaping Finance in Asia.” The author writes “peer-to-peer lending is growing rapidly, allowing individuals to lend to small businesses without the involvement of banks.” This news underscores the pervasiveness of the marketplace lending phenomenon.

Bondora mentions

P2P Banking shared international P2P lending lending statistics for more than 50 businesses as of February of 2017. Bondora was on the list showing a 34% increase in loan volume originations in the month compared to the same period last year.

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Estonian World reported on the country’s “continuing trend of innovation.” The author referenced Bondora as an example of a recent fintech startup making progress.

Weekly industry news roundup – February 27, 2017

Around the world

Forbes interviewed Matt Burton, the CEO of Orchard. His firm empowers marketplace investors by aggregating data across more than 20 P2P firms. The company is growing at incredible speed. This pace illustrates the need, on the part of the investors, to gain accurate insights and transparency. “Investors not only need access to data, but they need to trust that the data is of a high quality,” remarked Burton.

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The Washington Post published an article revealing that “The mortgage market is dominated by non-bank lenders.” The author explains that “In 2011, 50 percent of all new mortgage money was loaned by the three biggest banks in the United States: JPMorgan Chase, Bank of America and Wells Fargo. But by September 2016, the share of loans by these three big banks dropped to 21 percent.”

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Entrepreneur discussed four trends impacting online business lending. The author argues that while the industry is changing it will undoubtedly continue well into the future. The author also predicts that business offerings will grow, bank partnerships will form, self-imposed regulations will develop, and government regulations will deepen.

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Spend Matters Network discussed the solutions available to small businesses seeking loans. Marketplace lenders are increasingly offering faster and less expensive ways to fund small business operations. As a result, analytic firms have developed to help these businesses determine which marketplace lender is right for their needs.

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Huffington Post cited marketplace lending as one of aspect of “6 Ways to Make (Legit) Money While You Sleep.” Over the years the industry has become more accessible to investors. Rightfully, the author encourages potential investors to research the expected returns.

Bondora mentions

Our founder and CEO, Pärtel Tomberg, shared his views on Borse Online. Partel discussed how Bondora is designed to unite groups of borrowers and lenders which results in better terms and higher returns.

Weekly industry news roundup – February 20, 2017

Around the world

GlobeSt published an article exploring the broad based acceptance of marketplace lending in the borrowing community. One industry insider remarked, “Once a novelty, they are now an established capital source and are compared favorably against crowdfunding platforms and traditional lenders.” Marketplace lending is becoming more niche as well. Some newer entrants to the industry specialize in commercial real estate loans.

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National Mortgage News wrote about the “era of self-service online mortgages.” The author makes an interesting point “that humans may be more biased than algorithms.” Additionally, the cost structure of a traditional bank makes smaller customers less attractive. This segment of the market is where marketplace lending can deliver solutions.

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Crowdfund Insider discussed the changes to the marketplace lending industry in 2016. Marketplace lending insider Ram Ahluwalia remarked ,”year over year originations are still up across the industry.” The future of P2P lending will likely include greater institutional business to supplement the retail segment.

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Value Walk identified the problem of diminishing dividend returns and low bond yields. The author posits that marketplace lending may serve to “earn 7% returns in a 2.5% world.” The future is promising as evidenced by the fact that “In 2016, P2P investors earned net annualized returns north of 7%.”

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Forbes discussed how growing college tuition is pushing the marketplace lending industry higher. “Morgan Stanley estimated that P2P student loan issuance will grow at a 20% compounded annual rate through 2020 and account for 14% of this market,” shared the author. As tuition costs continue to rise it’s likely that lending needs in this sphere will help sustain and grow originations.

Bondora mentions

Fonds Online published a guest post from our CFO Rein Ojavere. In the article Rein discusses why so many successful FinTechs come from the Baltic countries – and what Germany can learn from it.

Weekly industry news roundup – February 13, 2017

Around the world

Forbes published an article examining what a possible Dodd-Frank rollback could mean for marketplace lenders. The author makes an interesting argument in favor of building a stronger regulatory framework around P2P lending. He believes such measures would actually strengthen the industry by legitimizing the relatively new practice of peer-to-peer lending.


Fortune posted an interesting article about consulting firm Accenture that developed a software to help secure blockchains for businesses. Accenture debuted a system that integrates the technology, also called distributed ledger tech, with hardware security modules (HSMs), that corporate IT teams use to keep data safe. The appliances handle digital key management, a fundamental aspect of cybersecurity that controls who has access to what information on a network. While the software is still patent pending, it would be a step forward for allowing businesses to start adopting blockchain technologies into their IT systems.


Business Insider discussed an interesting venture called MarketInvoice. The firm is similar to traditional marketplace lenders. However, the loans are issued to businesses which secure the agreements with unpaid invoices. The model appears to be sustainable for the time being with a projected 2 billion in lending by the end of 2017.


Crowdfund Insider released a piece titled, “The Potential of ‘Crowdlending.’” The author discusses the need for traditional banks to stay competitive as many analysts and experts agree that lending is continuing to move online. This migration away from brick and mortar businesses is unlikely to slow. Software providers are responding by creating software that retrofits older bank models into faster, ecommerce firms.


Fast Company wrote an article exploring the practice of ignoring FICO scores when issuing loans. Many marketplace lenders are using their own proprietary underwriting score in lieu of the more traditional FICO number. Many of these firms believe they can create a more accurate credit profile of a borrower with other analytics like 2 years of transaction information.

Weekly industry news roundup – February 6, 2017

Around the world

Forbes published an article examining recent moves by US-based investment advisor Third Point to capitalize on the world of marketplace lending. Billionaire Dan Loeb remarked, “As the origination and securitization of assets have become more difficult for larger financial institutions, smaller technology‐driven platforms have filled the void.” His firm expects this arena to soar amid the pro-business spirit of the Trump administration.


FinancialBuzz shared findings which show a rise in marketplace lending activity in the fourth quarter of 2016. The author writes that the “Quarterly Consumer Credit Demand Index” reported an approximate 12.4% increase in personal loan applications for the period relative to the same time in 2015.


Digital Journal released a piece discussing how technological innovation has driven the spread of global P2P interfaces. The author cites a report from Transparency Market Research which acknowledges that “the opportunity in the global P2P lending market was worth US$26.16 bn in 2015. Analysts predict that the market valuation will reach US$897.85 bn by 2024.” In addition to technology, emerging economies are likely to be key drivers of this growth in the coming decade.


Bloomberg released an article reviewing the long-term plans of financial software company Misys to enter the peer-to-peer lending world. The author indicated that the CEO believes traditional banks have fallen behind FinTech startups that offer better lending solutions for those seeking personal loans.


Satellite PR News released information from a Peer-to-Peer Lending Market report projecting an industry compound annual growth rate of 53.06% by 2020. The report also explores the competitive landscape among vendors, consumer spending patterns and emerging challenges to growth.

Weekly industry news roundup – January 30, 2017

Around the world

Reuters published an article reviewing recent actions from The American Bankers Association (ABA). The group is seeking their own marketplace lending platform in an effort to compete with the growing peer-to-peer industry. In particular, small banks, with fewer resources are struggling to compete with the speed and low costs of alternative lending.


Altficredit discussed a new FinTech business called LendingRobot. The technology helps individuals create a portfolio of investments across a variety of marketplace lenders. The approach is similar to a robo-advisor only in this case the selection of investments is limited to P2P business.


YahooFinance discussed the rapid rise of China Rapid Finance Limited, China’s largest consumer lending marketplace. Much of their ascent is credited to innovative technology and the use of “Predictive Selection Technology to acquire customers on a massive scale at low cost.” By the end of 2016 the company funded a total of over 10 million loans.


Fox Business discussed Citigroup’s aspirations to enter the marketplace lending business. In this case the company is focused on small business lending. Citigroup is offering loans up to $1 million. This group is considered an underserved segment of the lending market.


The Jakarta Post Focused on the Indonesian marketplace Lending world in their review of the data needed to succeed in P2P lending. The author stresses the importance of connecting more data points to better understand the credit profile of a borrower. Accordingly, the author suggests that “more services like electricity bill payment need to be consolidated and structured for an effective credit rating mechanism.”

Weekly industry news roundup – January 23, 2017

Around the world

Finance Magnates published an article forecasting that marketplace lending will drive business growth in 2017. Alternative lending is valuable not only for personal loans but for businesses seeking financing alternatives. As the author explains, “P2P loans are unsecured, so you don’t have to tie up precious collateral, the funding process is faster than a bank and requires less paperwork.”


Reuters explained new moves by traditional banks aiming to evolve into the P2P marketplace. “Financial technology vendor Misys is launching software to enable banks to provide peer-to-peer lending to their customers as competition from young companies in the sector heats up,” explains the author. This comes amid growing interest in marketplace lending as an alternative to slower, conventional methods.


Equities.com reminded investors to consider marketplace lending as a poart of their protfolio in 2017. Their research illustrates that “Even taking the very conservative approach of investing in the highest-quality loans, you can still earn almost five times the 1.16% rate now available with the average one-year bank CD.” This is certainly true at Bondora where 89% of investors have earned over 10% annually.


ValueWalk provided a brief overview of how investors can manage marketplace lending. The author explains how diversification and analytic tools are the best ways to succeed. In this case diversification means holding many loans. Using tools means opting for new third-party programs which are available to investors who want to analyze P2P returns across firms.


Bloomberg explained the intersection of FinTech and RegTech. FinTech (Financial Technology) describes any kind of technology designed to facilitate transactions and investments. RedTech describes digitized solutions for firms (like P2P businesses) facing complex regulation standards. In an effort to handle regulations “these internet-based marketplaces have teamed up with big banks to underwrite loans for them.”

Bondora mentions

Bondora got a mention from a German Aktien-Blog article which examines the reasons why borrowers and small businesses are turning to P2P and other online lending platforms for credit instead getting it from banks.