If you know the P2P lending platform Mintos, you might have heard of the loan originator CreditStar. If not, CreditStar is the partner company behind LenderMarket. Knowing that CreditStar has high-interest rates on Mintos, and high ratings based on both Mintos (B rating) and P2P Explorer (Score 79) ratings I decided to conduct a thorough review of the LenderMarket crowdlending platform.
LenderMarket is a peer-to-peer lending platform that issues consumer loans in Denmark, Spain, Poland, Czech Republic, Estonia, Finland, Sweden, and the United Kingdom. The interest rate offered is 12% with loan periods of 1 to 12 months. The only currency available currently is euro. There is a buyback guarantee on all loans provided on LenderMarket. There are no fees for investors.
- Loan types: Consumer loans
- Loan terms: 1-12 months
- Interest rate: 12%
- Auto-invest: Yes (Easy to use)
- Buyback guarantee: Yes
- Fees and costs: Zero fees
- Minimum investment: €10
- Currencies: EUR
- Secondary market: No
- Bonus: 1% of the total deposited funds during the first 60 days.
- Sign-up link + Bonus: LenderMarket
What is LenderMarket P2P Lending Platform?
LenderMarket is a platform created to bring funding from investors to loans issued in various European countries, through one P2P lending platform with trustworthy borrowers. The team behind LenderMarket has pooled their knowledge and skills to create a digital investor portal.
The partnership that has created LenderMarket is the combination of the CreditStar Group. The subsidiaries of the CreditStar Group (CreditStar Finland, CreditStar Denmark, CreditStar Sweden, etc.) are digital consumer finance companies. Whether you are a private or institutional investor you can use LenderMarket to invest in consumer loans.
CreditStar is known from the peer-to-peer lending platform Mintos. CreditStar joined Mintos back in August 2016 and has an average interest rate of 10,9% with a buyback guarantee on all issued loans.
How does LenderMarket work?
LenderMarket is a platform that collects the CreditStar Group’s subsidiaries loans into 1 platform investors than can use to invest. CreditStar Group currently has 8 subsidiaries focused on digital consumer finance in 8 different countries. However, only 5 are represented on the LenderMarket platform. The 5 countries that are represented currently is Czech, Poland, Finland, Spain, and Estonia.
The investing works like most other platforms. There is the possibility to invest in loans manually by going to the “loan listings” section. It is possible to filter based on the interest rate and loan term. Which is very limited filtering given the interest rate is fixed at 12%. Hence, there is only the loan term to be filtered.
LenderMarket has made an auto-invest function. The auto-invest extents the filtering options with loan origin.
Getting started on LenderMarket
The first step to investing on LenderMarket is to sign up to the platform. The first step in the registration process is to provide the information which they ask for in the picture below. Simple and straight forward.
After the basic information has been filled out, the next step is to complete the KYC (know-you-customer). This is required for any digital financial service provider due to AML legislation. LenderMarket has probably been the fastest to review my passport and to approve it. It took only 20 minutes.
The last step is to fund your account with some money. From here you can go into manual investing or using the auto-invest option.
Investing on LenderMarket P2P Lending Platform
LenderMarkets platform reminds me of Fastinvest. The manual investing is easy and the auto-invest is straight forward. There is really no confusions and there is minimal customization to the loans. While most want a high level of customization, it is nice to have a simple setup like the one provided by both Fastinvest and LenderMarket.
Manual Investing Through The Loan Listings
The manual investing option has a very limited way of selecting loans. Therefore, I see no reason for using the manual investing option.
However, if you like to pick each loan yourself you can do so.
Based on their simple approach to constructing a P2P lending platform based on consumer loans from 5 different loan originators, it is quite limited how much customization is possible. However, all investing can be made automatically.
Therefore, I recommend setting up an auto-invest that suits your preferences.
LenderMarket offers a buyback guarantee on all of their loans, with no exceptions. When the loan becomes overdue by 60 days it is repurchased by the loan originator. The buyback guarantee included the principal, accrued interest and a late payment fee.
There is no grace period. This means that if the loan is due the 1. of January, the loan will be reported as delayed from the 2. of January.
LenderMarket Team And Organization
It is very difficult to find any information about the management of the LenderMarket organization. It is important to know that LenderMarket is a new platform (went online June 2019), hence the current goal of the team might be to deliver a good product, before obsessive marketing and transparency.
Using Trustpilot usually is a got “pilot mark” to quickly examine the general public’s opinion on a platform. LenderMarket has a mixed review on Trustpilot.
One user reports that 60% of his portfolio is overdue. Sadly, he did not report if the buyback guarantee was working. Another user says that about 50% of his portfolio is overdue.
It seems (based on 3 reviews) that the loans are very common to be overdue.
LenderMarket’s Financial Statement
Looking at LenderMarket’s financial statement would not make sense since the buyback guarantee is an obligation for the loan originators. Hence, it will make sense to look into the CreditStar Group’s financial statement.
Looking into CreditStar Group’s financial statement it can be seen that they are making profits. I will highlight some key figures below with some financial ratios.
- Revenue from interest income: €24.172.000
- Profit margin: 11,8%
- Debt ratio: 78,9%
- Return on Assets (ROA): 3,14%
While the ROA does not say much in itself, it is an indicator of how well they utilize their assets. According to ReadyRatios.com the ROA varies a lot, and an ROA of 3,14 is quite average. In comparison, Mintos had a ROA of 13,6 % in 2017.
Overall the financials are quite strong. They are not hurting and they are not the world’s most financially benefiting company but have solid fundamentals.
Is LenderMarket Safe?
LenderMarket offers a buyback guarantee on ALL loans. While in the auto-invest setting you can opt-in and out of the buyback guarantee loans. However, on their website, they promote that buyback guarantee is offered on every loan. I suspect that they might introduce loans without buyback guarantees in the future.
Furthermore, they have an address called “Coliemore House” in Ireland. When looking up the address on google maps it is hard to find any commercial buildings. However, there is an enclosure, which is labeled with “private ground” on the outside. I suspect that the offices are located behind those walls.
While the address is quite specific it makes me uneasy that I cannot see the offices from the street, and that it has to be “hidden” behind concrete walls. Might just be my Scandinavian ignorance.
After a reader did some thorough digging, she found this building about 500 meters from the other address. Apparently Google Maps doesn’t know the address (shows the building above when inserting the address to Google Maps). However, on the sign on the wall is “Coliemore House”.
Q&A With LenderMarket Business Manager
I sent an email to the support of LenderMarket to get some answers about the platform. The business manager Omayra Roig replied to my email and answered the following to my questions:
Question 1: Why is it so difficult to find any information about the team behind LenderMarket? Why is the managing director, CFO, etc.? How many employees are there currently full time?
Answer 1: As Lendermarket launched publicly less than a year ago (May 2019), then currently the company has a relatively small core team of full-time employees of less than 10 people, covering the functions of a Business Manager, Risk Specialist, Investor Relation Specialists, and few other back-office functions. As the company and its investor base are growing, Lendermarket is also focusing on adding new members to the team.
To cover additional needs, Lendermarket is currently making use of a cooperating agreement with Creditstar Group – to use members of different departments of Creditstar’s team as extended resources for any additional needs. When it comes to strategic decisions related to the growth directions, vision, etc. of Lendermarket, then this area is still supported by the Management of Creditstar Group. The business of Lendermarket has been founded by the Management of Creditstar Group.
Besides, at the moment there is no precise CEO position in place for the business.
Question 2: Looking at Trustpilot, 2 of the 3 reviews mention that their portfolio consists of over 50 percent overdue loans. Is this common practice for LenderMarket? Are there made any incentives to improve this issue?
Answer 2: Most of the portfolio is delayed within the sector of the short-term lending industry and it is quite common or standard. Lendermarket offers 60 days for the Buyback Guarantee. From our end, we cannot interfere in the debt collection process of Creditstar.
Question 3: It is known that CreditStar is a loan originator on Mintos. Why start a new lending platform? If the goal is to diversify why not just become a loan originator on other platforms (such as Grupeer)? What is it Lendermarket will offer that other platforms cannot already?
Answer 3: That is a question mainly to be addressed to Creditstar Group’s team. We at Lendermarket do not have full knowledge of all the ins and outs of Creditstar’s strategic decisions.
As for what Lendermarket could offer that other platforms cannot, we’ve seen a strong demand during the last months and the need for more trustworthy P2P sites. Also, we’ve received positive feedback on having one strong loan originator, instead of being a platform with several small loan originators.
Question 4: Given the ease of finding financial statements on CreditStar Group and CreditStar Group’s subsidiaries, why is it not possible to find any financial statement from LenderMarket?
Answer 4: Since Lendermarket started its operations in 2019, the reports will be public in the Irish Companies Registration Office (https://www.cro.ie/), by the latest in February.
Question 5: What are the current platform statistics? How many investors are registered, how many are signing up per month, what is the average investor account, what is the default rate, etc.?
Lendermarket made a public launch at the end of May 2019. It is in our roadmap to start publishing various platform-specific statistics after a year of operations, so roughly to say May-June this year. As we are still a relatively young business, while growing quickly, then our primary focus has been to ensure the delivery of some critical features for the users + automation for the platform management. The statistics part is in the process of being mapped out but takes a bit more time to deliver. However, to note very briefly, then we will be shortly celebrating the milestone of having 1 000 investors on the platform.
What are the Risks of Investing Through LenderMarket?
- Backed by a company with solid financials.
- Has a relatively high-interest rate for investors.
- The platform is simple and easy to use.
- Has a strong track record from Mintos.
- No information about the management or employed personal at all.
- Young platform.
Fees And Costs Of Using LenderMarket
LenderMarket is 100% free for investors. They do not take management fees, deposit fees, account fees, withdrawal fees, or anything related.
LenderMarket Bonus (LenderMarket Promo)
If LenderMarket sounds like a platform for you, you can use my link to receive a bonus. You will get 1% cashback on the funds you deposit the first 60 days. Let’s say you invest €1.000, then you will get €10!
Conclusion On LenderMarket Review
LenderMarket is a young platform and has no financial statement available. Furthermore, there is no information to be found on the management when trying different keyword searches on google. This does concern me. However, I have written an email to their support to help get cleared on the topics.
However, the CreditStar Group has a proven track record through the P2P lending platform Mintos. Furthermore, the Group’s financials are quite solid. The platform is intuitive and easy to use, which is also a big plus in my books.
I have invested a small amount of money in LenderMarket because the platform seems like a good opportunity to diversify. Having CreditStar Group being the loan originator gives me the courage to invest my money at the LenderMarket platform.
Frequently Asked Questions About LenderMarket
Is LenderMarket safe?
LenderMarket can be seen as medium risk P2P lending platform. Despite the absense of information in the management, LenderMarket is backed by a loan originator called CreditStar from the biggest P2P lending platform Mintos. Furthermore, CreditStar has solid financial fundamentals. All loans issued on the platform also comes with a buyback guarantee.
Can i get information about the borrowers?
There is no information on the borrowers. This could be for the protection of the borrower and to comply with data protection laws.
How does the buyback guarantee work?
LenderMarket has a 60 day policy. If the loan reaches its buyback guarantee time of 60 days, the investors are compensated with the principal, accrued interest and a late payment fee.