German investment management company nordIX will invest 5 million EUR to the consumer loan portfolio of the peer-to-peer lending platform Finbee.
According to Darius Noreika, the head of Finbee, nordIX’s funds will be directed to all newly issued consumer loans, and the share financed by the fund will be at least 38% for each loan.
“The funds raised will allow us, first and foremost, to speed up loan financing and ensure that borrowers have more efficient access to the money they need. At a time when we are seeing increased demand for loans for home repairs or other larger purchases due to rising inflation, faster access to the financing we need is really significant. Especially for those who are interested in longer-term loans, or larger amount for a longer term are now forced to wait a few days. This is due to the fact that shorter-term loans are traditionally more popular among investors, D. Noreika comments. “And for investors, the advent of the nordIX fund will provide additional security and encourage invest even more.”
The nordIX European Consumer Credit Fund targets a stable return with a low level of volatility. “Given the high degree of transparency and regulation the Lithuanian consumer lending market is one of the most interesting markets we are active as an investor. Finbee’s loan portfolio fits very well to our risk-return expectations. Furthermore, the management was able to convince us of their capabilities and vision during the due diligence process. Also worth mentioning is the investor journey on the platform, which is state of the art ”, comments Claus Tumbraegel, one of nordIX’s CEOs.
D. Noreika says that their company had to meet more than a dozen requirements in order to apply for the nordIX investment. The fund assessed the solvency assessment, credit risk assessment, recovery processes and results of the peer-to-peer lending platform, the historical return on the Finbee consumer loan portfolio and the quality of the portfolio. It also audited part of the loans issued, checked the loan documents, whether the information was displayed correctly on the platform and whether it corresponded to the real cash flow. The audit did not reveal any deficiencies.
“The financial position of our company was also important for the fund. We are one of the few fintech companies to be profitable for more than a year. Stable and profitable operations provide additional security for the investor, as they ensure business continuity, allowing the business to sustain itself and grow sustainably without additional assistance from investors or shareholders”, notes D. Noreika.
Last year, Finbee issued 12.7 million EUR consumer loans, which is 47% more than 2020. During the first four months of 2022 5 million EUR of consumer loans have already been issued, it is 28% more than in the corresponding period last year. It is expected to issue 20 million EUR of consumer loans throughout 2022.
The peer-to-peer lending platform Finbee was launched in the summer of 2015. A total of 144 million EUR has been issued to residents and businesses through this platform since its inception. 72 million EUR of loans was granted under the state support measure “Loans to the businesses most affected by COVID-19”. The platform has more than 120 000 registered users, of whom almost 11 000 actively invested or borrowed last year.
2009 Hamburg-based nordIX AG specializes in fixed income investments, focusing on bonds and derivatives. The company manages several investment and separate funds and develops smart investment solutions. In addition to asset management services, the company also provides brokerage services for bonds and other fixed income financial instruments to institutional clients.