Neo Finance teases European expansion
Lithuanian peer-to-peer lending platform Neo Finance is planning to launch into another European country in the second half of 2023.
The consumer lender said in its third-quarter results announcement that it has already granted more than €120m (£103.29m) in loans in Lithuania, and has become profitable just seven years after its launch.
Neo Finance recently invested more than €3m into its own in-house software to manage its P2P lending business and said that it is now ready to enter larger markets.
“Taking into account the investments made, the experience gained and the understanding that Lithuania is a very small market with limited scope for volume growth, the board decided to prepare for expansion into one foreign market and to launch there in the second half of next year,” the company said.
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“Neo Finance has already started the preparatory work to develop its consumer lending business in a larger European Union country and will aim to do so in the second half of 2023.”
Elsewhere in the quarterly financial statement, Neo Finance reported that all of its businesses grew in volume terms, quarter-on-quarter. The number of consumer loans issued by the platform increased by 16 per cent.
Furthermore, the platform’s profits grew by 38 per cent compared with the same quarter of 2021.
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However, the platform warned that “like everyone else, we are currently working in a difficult economic and geopolitical situation”.
While Neo Finance reported a reduction in the number of retail investors using the platform, it said that institutional investors are increasing their volumes.
“At the moment, we are seeing a slight decrease in the activity of retail investors due to the [Ukrainian] war situation and other negative factors, but institutional investors are not reducing their investment volumes, in fact, they are doing the opposite, which is allowing them to continue to increase their volumes while maintaining a sufficient money supply,” a platform spokesperson said.
“So, while the overall market backdrop is negative, there are also positive signs in our performance.”
Neo’s consumer lending business is seeing a growing number of existing consumer borrowers choosing to refinance their loans on the platform. This has led Neo Finance to predict ongoing growth in the number of loans originated through the platform in the fourth quarter of the year.
Read more: Neo Finance achieves record quarter for lending
