What is Fellow Finance?
Fellow Finance is a p2p-lending platform where investors can invest in Finnish consumer loans and borrowers can apply for a loan setting their own borrowing criteria. Platform offers an active secondary marketplace for investors in case they would need to turn their investments into cash. The average yield for investor has been 13%. Fellow Finance offers a secure place for lending and borrowing.
Who founded Fellow Finance? What is your background?
Fellow Finance was founded by Fellow Finance CEO Jouni Hintikka, CIO Teemu Nyholm and CSO Harri Tilev. The Fellow Finance team has on average over 15 years of international operational and development experience in Finance encompassing savings, investing, financing and collection business and have granted over 550 million € worth of consumer loans in Europe and by doing so been able to offer attractive investment opportunities for investors.
What unique-selling-point does Fellow Finance have in comparison to other p2p-lenders?
High returns with low volatility, ability to turn investment into cash on the secondary market, investor loss risk is capped to 30% – in case of borrower payment default we return 70% of the investment back to the investor. Throught Fellow Finance investor can for the first time invest directly in Finnish consumer loans.
What are the main advantages for your borrowers in using Fellow Finance?
The borrowers are able to set the maximum interest rate they are willing to pay and also able to set the loan duration in a way that the monthly repayment fits his monthly budget well. This results also in better repayment behaviour when the monthly repayment burden is not too heavy for the borrower. The auction based marketplace ensures the borrower receives the lowest offer on the market.
What are the main advantages for your investors? What ROI can they expect?
The main advantages of Fellow Finance platform is that it enables an easy way to create a diversified portfolio of consumer loans with steady returns. The secondary market is also very liquid which allows investors to liquidate their investments at any given time. In an event of borrower default, investor receives 70% of the open loan capital back. Thus the loss risk is capped. The aforementioned elements have resulted in an average returns of 13% (after loan losses).
How much money has been lend through Fellow Finance until today?
The cumulative intermediated loan volume is 46 million euro since our launch in 2014.
What has been the biggest challenge so far?
Recruiting personnel with the optimal skill- and mind-set.
What happens, if Fellow Finance e declares insolvent one day?
The investor money is kept on client funds accounts in all major Finnish banks separate from Fellow Finance funds. Thus investor money is never on Fellow Finance balance sheet. In an unlikely event of Fellow Finance insolvency the investor will still remain the owner of the receivable and continue receiving payments on the separate client funds account. The liquidator would take care that the repayments would be directed to the investors. The investor will always have all the loan contracts in order to be able to claim his receivables from the debtors.
What are your predictions for the industry in 2016?
I see more platforms coming to the market together with some consolidations. I believe that the regulation of marketplace lending will continue developing to a more unified form in Europe. I see continuing growth in awareness and interest in investing through p2p-platforms.
What are your plans for 2016?
We will develop the platform functionalities further and open our borrower side in the new European markets. We will launch the borrower side in Poland and Sweden and by doing so create a possibility for investors to diversify geographically. International investors can invest through our platform already. On borrower side we are looking to other European markets as well.