P2P SME loans specialist Zencap has entered into an alliance with a German bank.
Sparda-Bank Berlin is a cooperative bank with over half a million clients – the most of any cooperative bank in Germany. The bank has partnered up with Zencap, the Rocket Internet-backed online marketplace for small business loans. The purpose of the union is to broaden the range of investment services offered by Sparda, bringing a high-yielding and transparent investment medium to its existing customer base.
This partnership represents more than a system of mutual referral. Zencap now boasts a page of its own on the Sparda-Bank website. The Zencap zone provides customers with an overview of the platform itself and of the broader concept of “Crowd Lending”, and also allows the user to click through to the Zencap platform. The webpage also outlines the services/perks on offer via the newly forged partnership. These include a bespoke newsletter conveying lending opportunities within the local vicinity of customers and a direct hotline for Sparda customers. The focus of the partnership will be on funding projects based in Eastern Germany, but investors may choose to allocate funds to any campaign listed on the Zencap marketplace.
The partnership also comes equipped with a small deal-sweetener. Opening a bank account with Sparda-Bank ordinarily entails paying €52 – the cooperative share. If, however, you identify yourself as a Zencap investor, you receive the €52 as a credit note. Conversely, Sparda-Bank customers receive a €50 welcome bonus from Zencap if they choose to allocate €500 or more to the marketplace.
There’s a great deal of potential on display here. Zencap representatives tell us that Germany’s banking landscape is dominated by saving and cooperative banks. This partnership may therefore play a crucial role in better acquainting the public with the notion of putting money to work via an online marketplace. We’re also told that cooperation between the bank and Zencap may trickle into the former's branch network – further boosting the profile of P2P on the local stage.
This partnership veers away from the deal flow-driving tie-ups that we’ve witnessed between some high street banks and alternative lenders in the UK and US. Take, for example, the RBS reciprocal referral partnerships with Funding Circle and Assetz Capital, or Lending Club’s arrangement with Citi. Each was designed to herd prospective borrowers the marketplace lending sites.
The nature of the deal struck between Zencap and Sparda-Bank is quite different. It has instead been crafted to increase the flow of money coming through the Zencap platform, which would suggest that the platform is currently saturated with quality borrowers, or at least that it anticipates a level of SME borrower demand sufficient to match an increased supply of capital.
“The cooperation with Sparda-Bank Berlin is setting new standards for modern banking. Our joint mission is to offer private customers an investment product that is understandable and accessible 24/7. Moreover they receive access to an asset class that is convincing due to a transparent return and cost structure.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.