Bondora CEO Pärtel Tomberg

Bondora is a leading platform for investing in European personal loans. Since 2009 Bondora have processed over 900 million euro of loan applications from prime and near-prime borrowers. More than 12,500 investors from 40 countries have funded 50 million euro in loans and received over 9 million euro in interest payments. Bondora hast attracted many types of investors, from individuals investing a few thousand euro to sophisticated investors investing hundreds of thousands of euro. Lending School interviewed Bondora´s CEO Pärtel Tomberg and asked him, what is going on at the company.

Bondora ist eine der führenden Plattformen für Privatkredite in Europa. Seit 2009 hat Bondora Kreditanträge von Darlehensnehmern im Gesamtvolumen von über 900 Millionen Euro bearbeitet. Mehr als 12,500 Investoren aus 40 Ländern haben 50 Millionen Euro in Privatanleihen investiert und über 9 Millionen Euro an Zinserträgen erhalten. Bondora hat einen breitgefächerten Pool an Investoren, von Einzelpersonen, die einige tausend Euros investieren, bis zu erfahrenen Anlegern, die hunderttausende von Euros anlegen. Die Lending School hat Bondora Geschäftsführer Pärtel Tomberg interviewed und Ihn gefragt, was seine Pläne für das Jahr 2016 sind und wie es bei Bondora bisher gelaufen ist.

What is Bondora?

Bondora is the first cross-border marketplace lending platform connecting consumers with investors around the world.

Who is Bondora?

Bondora is our digital spokesperson. She is convinced that all people are by nature good and honest and deserve more trust in organizing their lives. Therefore, she is devotedly against the banks. She thinks that ordinary people don’t need banks – these were only invented to enslave people and earn gigantic profit. That is why there exist a loan market called Bondora.com, where people can lend money to each other directly.

Why should borrowers use Bondora instead of a normal bank?

Bondora is online and open 24/7 whilst most banks across Europe require borrowers to visit one of their branches during office hours.

Bondora is faster and more convenient than normal banks.

Bondora provides a wider choice of repayment plans and loan amount ranges.

How does your credit scoring differentiate from the bank´s scoring?

In many ways our scoring is similar to bank’s scoring but there are also areas where we are more advanced. Similarly to banks we use data from credit bureaus and consumer’s financial data to risk-score the customers. However we also use thousands of alternative data points to enhance traditional data.

What are the advantages for investors?

Bondora allows investors to earn premium returns on their long-term investment portfolios

Bondora allows investors to diversify across multiple jurisdictions in one go

Bondora makes investing easy through a simple interface, yet more sophisticated investors have still a lot of tools and data available

What ROI can investors expect?

Historically net returns have fallen in the 12 to 18% range

What countries do most of your investors come from?

Most of our investors come from German-speaking central Europe, UK and Scandinavia

How is the situation at Bondora?

The company is doing great and we’re looking to achieve major new milestones in 2016. We have a new dedicated investor product and support team in place and investors can expect a lot of new features in the coming months.

Bondora has processed € 421 million in loans in 2015. Will Bondora keep growing in 2016?*

We are certainly looking to beat our growth numbers again in 2016. We are looking to grow primarily through improving the product both for the borrowers as well as investors not through a marketing push.

Are you planning to add new feature to your online marketplace?

Thanks to the new investor team we set up end of last year we are now able to have much more focus on improving the investor product. Investors can continuous updates to the product over 2016.

Or any new products beyond unsecured consumer loans?

We are likely not going to venture into new loan products in 2016. There is still a huge untapped opportunity in the markets and segments where we are operating and there is no reason to look beyond before we are able to properly penetrate our target markets.

Can you share some past failings of the business?

I am probably most conscious about bad hires that we have done in the past. Getting wrong people will slow you down, create a bad atmosphere and can also destroy your product. However by today we have cleaned our organization and have an extremely competent and close-knit team at Bondora.

What are some of the most difficult obstacles Bondora has faced to date and what did you do to overcome them?

One obstacle has certainly been wrong people in wrong positions. Unfortunately there is no way for resolving such issues other than streamlining the team and bringing new, better people inside.

We have also faced a lot of up-hill regulatory battles due to lobbying of the banks and other competitors. However we have also been able to properly respond and prepare for regulatory changes and have by now established a very strong regulatory structure.

If you had to start Bondora all over again, what would you do differently?

If we would start again we would probably but more focus on developing the product based on actual metrics rather than individual feedback. We would also likely invest more into the regulatory setup as there is simply no shortcuts when it comes to financial regulations in Europe and if you skip something today you will have to work twice as hard in the future to catch up with work not done earlier.

What do you think about the influence of institutional investors on P2P-Lending? Good or bad?

Institutional lenders are certainly good for the entire marketplace lending scene and alternative finance. Without them the industry would remain in the fringe and would face a tough time trying to beat the banks.

In your opinion, what is the main reason P2P-Lending is not as big in Continental Europe as in the UK?

Firstly the retail as well as institutional capital markets are more advanced in UK meaning that there are simply more investors and people looking to invest their money.

Secondly the industry kicked off in UK so there has been more time for it to get a wider acceptance.

Thirdly the UK regulator and government has been more supportive in general for alternative financial products whilst in the rest of the Europe regulators and parliaments are trying to protect industry incumbents due to the power single banks have on those markets.

Lending School says thanks for the interview!

*Note: Bondora has processed € 421 million (loan applications) in 2015. 24€ Million were funded.