Regulator identifies “deficiencies” in Bondora’s credit assessment framework
Bondora has been told by the Estonian regulator that there are deficiencies in its credit assessment processes, and is making the required changes by 9 August.
Earlier this month, the Estonian Financial Supervisory Authority (EFSA) informed the European peer-to-peer lending platform that it had identified deficiencies in its internal regulations for assessing consumer creditworthiness and granting consumer credit.
The regulator has issued similar orders to other Estonian credit providers including Coop Pank, LHV Finance, Swedbank Liising, Luminor Liising, Holm Bank, and BB Finance.
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Bondora said it is “actively applying all necessary tweaks” and is “ready to refine responsible lending principles with the entire market and will implement all required changes by 9 August 2023.”
“The EFSA has modified or augmented its interpretation of implementing responsible lending principles,” Bondora said in a blog post. “These refinements weren’t previously communicated to us, but now they’ve been, and we’ll implement them. We have no objections to the EFSA.
“The shortcomings identified by the EFSA are technical and don’t insinuate any high-risk or unlawful activity on our part. For example, we’d now have to supplement the credit file to reflect a clear calculation of creditworthiness and supplement internal regulations with even more detailed process descriptions.”
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Bondora reassured investors that it has been operating in line with the law, and has never issued credit without proper, thorough assessments.
It said it does not foresee disruptions in issuing loans as it will operate normally without increased risks, and after implementing the required changes its risk level “will be even more appealing.”
“So far, we have issued credit agreements in accordance with the law and previous guidelines,” said Pärtel Tomberg, chief executive and founder of Bondora.
“We don’t foresee significant changes in lending conditions. I can reassure investors that credit hasn’t been issued in any loose or casual way.”
Bondora said the regulator’s heightened scrutiny of lenders’ internal processes is due to an audit conducted by the National Audit Office which found its supervision of non-bank credit providers has not been sufficient.
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