Country focus: Germany’s flourishing P2P lending sector
Germany has one of the most established and diverse peer-to-peer lending markets in Europe.
Up until 2022, it was home to one of the largest P2P lending platforms on the continent – Auxmoney. Founded in 2007 – just two years after P2P pioneer Zopa – the Dusseldorf-based lender grew its loan book to more than €4bn (£3.47bn), before shutting its doors to retail investors and shifting to an institutional only model. Today, the largest P2P platform based in Germany is real estate lender Bergfurst, which is approaching its €200m lending milestone.
Read more: Association of German Lending Platforms rebrands
Germany’s long track record in P2P lending has created a familiarity with the sector for both borrowers and lenders. Most of the major European P2P brand names have field offices in the country. Funding Circle once had a German branch, although it has long since closed. Iwoca has an office in Frankfurt, and EstateGuru and Mintos both have offices in Berlin.
German regulation has historically been strict when it comes to crowdlenders and other fintech lending platforms, and this means that despite its huge population (83 million potential borrowers and lenders) and relative wealth, Germany is home to less than 10 per cent of Europe’s P2P lending platforms. Yet German investors are among the most active P2P lenders on the continent. The vast majority (25.06 per cent) of Robo.cash investors are based in Germany; and more than 14 per cent of EstateGuru’s historical loans have been funded by German investors.
Read more: Most mature European P2P markets also have highest GDP
The incoming European Crowdfunding Service Providers Regulation (ECSPR) is likely to bring even more German investors into the P2P fold, as it aims to make it easier for European crowdlenders to operate seamlessly across EU countries.
The ECSPR could also accelerate the pace of innovation in Germany’s home market.
Read more: New EU rules “more robust” than UK
At the time of writing, just nine P2P lending platforms have been founded in Germany and continue to maintain their headquarters in the country. They are:
- Bergfurst
Bergfurst is the largest crowdlending platform in Europe at present, with almost €200m loaned to date. It specialises in real estate debt and offers investors returns of between six and 7.5 per cent.
- Bettervest
This sustainability-focused platform was founded in 2012 and invites investors to “invest in impactful projects that benefit people and the planet”. It is currently targeting seven per cent in returns.
- Econeers
Another platform with a sustainability focus, Econeers offers investors the chance to fund sustainable businesses and green corporate bonds. It has funded €32m to date, with investor yields hovering around the seven per cent mark.
- Ecozins
Ecozins allows investors to back “projects that bring returns and protect the climate.” Like Econeers, it does this by listing individual projects which return anywhere between three and eight per cent.
- GLS Crowd
GLS Crowd is yet another Germany-based crowdlender with a focus on funding sustainable businesses. Investors can back individual projects with returns ranging from five to seven per cent.
- Greenvesting
As the name suggests, Greenvesting is another sustainability-focused crowdlender which lists individual business loans. Greenvesting has historically returned six per cent, but some projects are targeting as much as eight per cent for investors.
- Marvest
Marvest may well be the only European P2P lender focused entirely on maritime loans. It offers seven per cent in returns with quarterly interest payments. All Marvest borrowers are shipowners, and these ships are used as collateral for the platform’s lenders. The ships are believed to hold an inherent value due to their steel content, which can be extracted should the vessel be unable to sail.
- Moneywell
Like many of the other lenders on this list, Moneywell is a business lender that prides itself on choosing sustainable businesses to support. Founded in 2017, it offers individual loans to investors with yields of between three and six per cent.
- Propvest
Propvest is a property P2P lending platform where investors manually select loans to fund. All loans are secured against real estate, and returns are advertised at four per cent or higher. Most of the properties listed on the site are based in Germany, but Propvest has been expanding its borrower base across Europe in recent years.