Elfin Market set to lend its own funds
Elfin Market has announced it will lend its own funds on the platform, sourced from institutions, alongside retail investors.
The peer-to-peer consumer lender said that it obtained an additional consumer credit authorisation from the Financial Conduct Authority (FCA) in December 2022, after a year-long application process.
Elfin Market said this means it can now lend its own funds sourced from institutional investors and comes in addition to the original P2P lending authorisation.
“This is a significant milestone in our journey to disrupt the credit card market as it enables us to grow much quicker,” Mansour Bouaziz, co-founder and chief executive at Elfin Market said. “Hence help more people save on interest – [and we are] continuing to offer top-notch services in the long run to our borrowers and lenders.”
Read more: Elfin Market facilitates loans of more than £17m in 2022
Although Elfin Market will be acting as a lender on the platform, it will not be bearing any credit risk from borrowers, much like the P2P lending model.
Rather, it will be running two loan books in parallel – one funded by P2P investors and one funded by institutional investors.
Bouaziz said that the new funding line will not impact its existing borrowers. New borrowers’ credit lines will either be funded by the platform or P2P investors. The APR, credit limit and repayment schedule they will be offered will be the same whichever funding line they are allocated to.
Both funding lines will have similar risk profiles and deployment times, Bouaziz said.
“The allocation of new borrowers across the two funding lines will be optimised to ensure default risk and exposures to our different borrower risk categories remain very similar,” he added. “This process was designed to be fair and equivalent for both P2P and institutional investors. Whenever necessary to allow some difference between the two loan books, advantage will always be given to P2P investors.”
Elfin Market is unique among P2P lenders as it offers its loans through a credit card product called the Elfin Wallet, launched in September 2019.
Since the business launched four years ago, it has reached over £35m lent and 160k transactions made via the Elfin Card and mobile app.