How Lendermarket works with its loan originators
Lendermarket is looking for new loan originators.
The Dublin-based peer-to-peer loan marketplace has been growing steadily since it launched in 2019, and now has more than 17,000 investors seeking opportunities to earn double digit returns by backing buyback-guaranteed consumer loans from a cohort of global lenders.
In order to meet this growing demand, the platform is building out its portfolio of lending partners and it is actively seeking new originators.
“One of our priorities when pushing the growth of our platform is to be able to offer diversity to our investor community,” says Carles Federico, chief executive of Lendermarket.
“We believe that by continuously expanding our network of originators, we can provide a broader range of investment opportunities that cater to different interests and risk profiles.
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“This approach not only enhances the overall investment experience but also helps to mitigate risks through diversification.”
Federico is keen to collaborate with “a diverse array of loan originators” in order to ensure that the platform remains dynamic and responsive to the evolving needs of its investors.
“Joining our platform means becoming part of a community dedicated to creating value and fostering financial growth,” he says.
“We are looking for partners with a track record of success and a commitment to transparency and excellence.
“Specifically, we seek originators who demonstrate proven success, have a diverse offering for our community, align with our values and mostly, that are compliant with our risk management.”
Lendermarket currently works with five originators: Mexico’s CrediFiel; Estonia-based Creditstar Group; Spain’s Dineo; Nigeria’s QuickCheck; and Colombia-based RapiCredit.
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All of these originators co-invest on every loan, with skin in the game from between five per cent and 10 per cent, depending on the originator.
The average interest rates for all of these platforms range between 12 and 18 per cent, per annum.
Furthermore, all of these platforms have signed up to Lendermarket’s innovative buyback guarantee programme.
The buyback guarantee represents an additional protection for investors if a loan repayment is delayed or missed. Under the terms of the agreement, the loan originator agrees to buy back any loan which is overdue by 60 days. The principal plus accrued interest is then paid back to the investor.
This guarantee is one of the reasons why Lendermarket has maintained its record of zero capital losses to investors.
Any incoming loan originator must be willing and able to offer the buyback guarantee. This might involve carrying out enhanced due diligence on prospective borrowers, and holding sufficient cash reserves in case of a default.
Lendermarket also manages its investors’ risk by carrying out detailed and ongoing due diligence on every one of its loan originators to ensure that they are operating to the highest standards.
Reviews are carried out quarterly on each originator, and Lendermarket assigns a risk rating to each one, based on their transparency, transactional monitoring, financial prudence, and legal index.
These ratings help investors to make more informed choices about their money, while upholding the Lendermarket ethos of diversity, transparency, and competitive returns.
“Ensuring that all loan origination processes meet the highest standards of legal and ethical conduct is crucial for maintaining the integrity of our platform,” says Federico.
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