A major German bank is launching a marketplace lending platform as part of a broader digitalization strategy.
Michael Kotzbauer and Birgit Storz of Main Incubator yesterday confirmed at a press conference that “Main Funders” – Commerzbank’s much-rumoured marketplace lending initiative – is set to launch next week, according to P2P-Banking.com. The platform will be SME facing, bringing together businesses seeking loans in the €200k to €10m range with professional investors. Multiple reports (including one from Reuters) suggest that these investors will be “institutional”. Both sides of the marketplace will be existing customers of the bank, with Commerzbank making use of its regional networks to bring borrowers onto the platform. This is somewhat reminiscent of the approach that Hargreaves Lansdown is said to be taking in structuring a P2P offering of its own. We first caught wind of the Main Funders initiative in late April this year.
Main Funders will assign credit grades to loan requests and set interest rates. All loans will be unsecured. The platform will charge a 0.45% fee on the loan amount to borrowers, multiplied by the duration of the loan, and a 0.2% fee to investors. The platform is clearly targeting the “M” of the SME lending spectrum, as few other P2P providers have to date. One potential competitor stands out in the form of CreditShelf, which recently closed a fundraise.
Commerzbank does not believe that the new platform will cannibalise its existing business. The rhetoric seems to be that the bank would prefer to direct certain customers to its newly launched platform than to lose them entirely to a rival bank or emerging fintech lender.
Commerzbank is by no means the first major bank to align itself with the emerging marketplace/online lending sector. We’ve seen a wide variety of tie-ups, none more noteworthy than the licensing agreement between JPMorgan Chase and small business lender OnDeck. But Commerzbank may well be the first bank to have launched a marketplace lending arm from scratch. Will we see another follow suit?
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.