FinBee is an online lending platform created in 2015. Their goal is to become the leading peer-to-peer lending company in Lithuania and to achieve rapid development in foreign markets.
Using innovative solutions they seek to create environment where everyone wins: borrowers getting low interest rates, lenders safely and easily getting high interest rates. They believe that by achieving these goals FinBee will develop rapidly and that is how t wheyill contribute in peer-to-peer services all around the world. Read the interview with Finbee-CEO Laimonas Noreika!
What is Finbee?
FinBee is rapidly growing P2P consumer lending platform with ambition to become a pan-European business and consumer loan provider in the near future.
Who founded FinBee? What is your background?
FinBee was founded by serial entrepreneurs from United Kingdom and Lithuania who have extensive experience in financial, IT sectors and new business development. FinBee founders from United Kingdom have almost 40 years of experience in developing and implementing banking and IT solutions. Founders from Lithuania have in depth knowledge of Eastern and Central European market and experience in business development, marketing and finance.
What unique-selling-point does Finbee have in comparison to other p2p-lenders?
We are extremely dedicated and work hard daily to provide best possible service to our clients. I believe that there are three main reasons why there is rapidly growing number of both lenders and borrowers who use FinBee:
- High interest rate for lenders. For example, on 18th January 2016 we registered an impressive 27,9 percent average interest rate.
- Almost non-existent late loan repayments. We examine every single loan application very carefully, only 6 percent of loan applications are approved and if lenders finance it, contract is signed tet-a-tete with each and every borrower. The result is that over five month of operations we disbursed more than €450K of loans and as of today we have only one loan that is more than 15 days late.
- Free of charge compensation fund. In autumn 2015 we were the first P2P lending platform in the region that introduced free of charge compensation fund to cover late loan repayments to lenders.
Why the bee? Do you like bees?
We do like bees of course! When we were establishing business, we were looking for a short and easily recognizable brand and domain name. „Fin“ in FinBee stands for financial technologies, bee is a hardworking and dedicated creature. The combination of two describes the essence of who we are – hardworking, dedicated financial technologies specialists. Our brand is catchy, simple an easily recognizible. Together with witty advertising it helps to attract borrowers who are credit worthy.
What are the main advantages for your borrowers in using Finbee?
The main advantage and reason why borrowers choose FinBee is that our interest rates are lower than the competition. It looks solid from lenders perspective, but current market situation in Lithuania allow to offer 20 percent interest rate loans and it still beats the competition, especially payday loan companies. Furthermore, our unique auction based model allows borrowers to receive even lower interest rates than they originally expected.
What are the advantages for investors? What ROI can they expect?
Currently, average interest rate is 27,9 percent (18th January 2016), but in the long term we expect interest rate to settle around 18 percent. Our auction based lending model and sophisticated auto lending solutions allow lenders to expect even higher return while keeping the same level of risk.
How much money has been lend through Finbee since starting in August 2015?
Until 18th January 2016, during first five months of operation, we have disbursed more than €450K of loans in Lithuania alone. We have a clear plan and blueprint how to achieve more than €1,2M during our first year of operations. And that will be achieved only with consumer lending in Lithuania.
Why did you choose to establish a compensation fund? Other marketplaces do not do it. What are the advantages and risks for your as a company in doing so?
It shows that we check every loan application very seriously and list only loans that have a very narrow chance of defaulting. Lenders see that and therefore invest more money via FinBee which let us be one of the fastest growing P2P lending platforms in Europe at the moment.
What happens, if Finbee declares insolvent one day?
We have wide range of checks and balances which prevent our platform from going insolvent. We have a steady and sustainable growth strategy and we do not and will not lower our standards for borrowers. That said, we are currently working on business continuity plan in the unlikely case of insolvency and our clients can be sure that all of the contracts between lenders and borrowers will still be valid and fulfilled.
What is the state of p2p-lending in Lithuania?
When we started in August 2015, we were only a second P2P lending platform in Lithuania. Less than a half year later, there are six operational P2P platforms, some journalists and experts say that P2P lending is blooming, but I would be careful. Marketing costs are very high and our main competitors are big payday loan companies. Taking that into consideration, I would say that after 2016 there will only be three P2P lending platforms in Lithuania.
As for legislation, in 2016 a new P2P business lending and crowdfunding law is to be adopted. What is particularly exciting is that it will open ways for P2P lending platforms to provide business loans, especially for small and medium enterprises and real estate projects. We expect that this will have a very positive impact on the whole market and further accelerate growth of P2P lending in Lithuania.
What challenges did you face in the first months of your operation?
We put a lot of hard work into balancing the demand and supply of the money in the platform, but I think that the main challenge for us and the whole P2P market is finding a trustworthy and creditworthy borrowers. Nothing else is important if borrowers in your platform cannot fulfill their obligations.
What are your plans for 2016?
Presence in at least one new foreign market, loan options for business in Lithuania. We also started to discuss our series A investment round. We hope to reach the deal just before Q3 2016.
The Lending School says „Thank you“ for this interesting interview.