Press Releases

 

 

Helsinki/Berlin, 28 June 2016 - Ferratum, a pioneer in mobile consumer loans and small business lending, takes the next logical step and expands into marketplace lending and investments. On its new peer-to-peer platform www.ferratumP2P.com Ferratum connects investors and borrowers.

 

Ferratum's latest addition to its product range, FerratumP2P, opens up a new source of funding independently of the company's own balance sheet. Unlike existing marketplaces, where participants are matched on an individual basis, Ferratum offers investments in credit portfolios, as Jorma Jokela, founder and CEO of Ferratum Oyj, explains: "We act as sole underwriter and bundle credit portfolios on our new platform. This enables investors in the next step to participate in a particular portfolio instead of a single credit which naturally helps to reduce risk." Ferratum leverages its specific competitive advantage, especially the convenient and fast underwriting process for borrowers. For investors the FerratumP2P process is convenient and fast as they get access to possible returns, diversified in a portfolio, with just few clicks.

 

As part of its service offering Ferratum handles all payments and collects possible overdue payments. In addition, Ferratum guarantees to buy back payments that are 60 days past due. Thus, the system secures 85 % of outstanding loans for the investors. The investor's return depends on the performance of the particular portfolio he/she is invested in. Currently investors can participate via FerratumP2P.com in Czech consumer loans, with an expected return of 8.9 % for a 12 Months period. The underlying loan types will be diversified in the next months. The minimum investment amount is 25 EUR. The loans provided on the platform usually range in between ca. 400 EUR and 1.000 EUR with a payment term of 6 to 12 months.

 

The timing of the new launch is convenient, given the zero interest environment, peer-to-peer investments are in high demand. Currently FerratumP2P is only available to retail investors but once established in additional countries it can be offered for institutional investors as well. Jokela on the relevance of P2P Lending for Ferratum: "This is an important strategic step for us, as marketplace lending is not limited by balance sheet restrictions. This allows us to develop the lending product portfolio, comprising higher volume and longer term credits in the very near future."

 

Peer-to-Peer lending is already a very established asset class with FinTechs playing a major role in establishing this market. Institutional investors have been using consumer loans for decades, not only to generate attractive returns, but also to diversify investments from bonds and stocks. It helps to reduce portfolio risk, as consumer loans correlate only marginally with most other asset classes.

 

 

 

The Finnish Ferratum Group, a pioneer in mobile consumer loans in Europe offers short-term consumer loans for private customers. Ferratum's customers can utilize digital media to apply for consumer credit in amounts varying between EUR 25 and EUR 3,000. Moreover, Ferratum offers successful small businesses installment loans with a term of six to twelve months. Managed by its founder Jorma Jokela, Ferratum has expanded rapidly since it was founded in 2005: Ferratum has more than 1.3 million active and former customers who have been granted one or more loans in the past and 3.9 million total user accounts in its database (as of 31 March 2016). Ferratum is represented in 23 markets. The IPO in February 2015 was followed by the introduction of the Ferratum shares to the SDAX index in June 2015.