Furthermore, the company not only successfully increased the number of loans issued to businesses, the number of which grew 46% last year but also began to operate profitably.
In total, last year more than 3,500 loans were used over the FinBee platform, with 357 of these being to businesses. The joint sum of loans issued to businesses reached almost 3.4 million euro – 67% more than in 2018. 90% more company applications for loans were received than in 2018.
“With the economy growing, business borrowing demand continues to rise. Meanwhile, individuals, who seek to satisfy their consumption requirements are actively taking interest in the opportunities offered by the peer to peer lending platforms – there has been a noticeable growth in credit refinancing loans. This comprised approximately a fifth of all loans. This shows that individuals are becoming more responsible and seek opportunities to reduce their financial burdens,” the peer to peer lending platform FinBee head Darius Noreika says.
According to D. Noreika, the fact that four years after its launch, the company has become profitable, is proof that the company’s operations model is very sustainable and by operating with a profit, the platform will be capable of focusing even more on issuing loans and that investing clients could continue earning double-digit returns.
According to FinBee data, last year, there was significant growth in the number of clients investing in loans. Compared to 2018, this number jumped 32%. The average sum invested by individuals in loans reached 2,100 euro. An average of 900 euro was invested in business loans – 34% more than the year before.
“We notice that investors are most drawn to small and short term loans. Nevertheless, when talking about investment returns and associated choices, the platform’s users employ vastly different investment strategies. Some are inclined to invest in low risk loans with lower interest rates, however very low loan return delays. Meanwhile, others, expecting good debt recovery results and opportunities to earn extra from delay interest, choose higher risk loans with higher interest rates and potential lengthier delays,” D. Noreika notes.
According to him, this year FinBee intends to issue businesses 50% more and individuals – 15% more loans.
In his forecast for the year, the head of the FinBee Verslui platform Audrius Griškevičius notes that a new breakthrough could occur due to the possibility for businesses to invest in loans. According to him, it is very likely that already this year, legal entities in Lithuania will be allowed to invest in private individuals’ loans through peer to peer lending platforms. For the platforms, this would grant access to institutional funds and would create opportunities to increase liquidity and generate better value for all investors.
“Another important step would be the unification of the EU member states’ crowdfunding platform regulations. Currently, regulations are being drafted at the European Commission, which will establish equal opportunities for all EU based crowdfunding financing platforms and will open paths for them to operate across the union. Differing regulations in individual countries currently restrict crowdfunding platform development opportunities, thus with the new regulations, so would new growth opportunities emerge,” A. Griškevičius says.
From the start of its operations, FinBee has issued individuals and businesses 29 million euro in loans. The platform has more than 50 thousand registered users, of whom almost 9 thousand actively invested or borrowed last year.
