Continental European marketplace lending origination volume for the month of June was €53.4m according to the Liberum AltFi Volume Index. This is just €200k more than was originated in May, however it still represents 37 per cent growth vs June 2015. As in the UK, growth in monthly origination volumes has slowed. The range between June and February has been tight - €52m to €57m.
Figure 1: Monthly Continental European Origination Volume (ex auxmoney)
Two platforms set themselves new high water marks for the month:
Funding Circle Continental Europe had a notably quiet month with only €780k originated. This is significantly below its run rate for the last few months and a long way below the high of €10.2m posted in February this year. It coincides with the departure of co-founder Mathias Knecht, perhaps the firm is undergoing a review post his departure and that has impacted the ordinary course of business?
June also heralded the end of the 2nd Quarter of 2016 and gives the chance to sit back and take stock of the industry’s progress. Quarterly origination volume was €207m. This was a new record for the sector, topping last quarter and the previous high by some €22m. The strong quarterly showing was boosted by Auxmoney which originated €44m over the quarter, the highest for any platform (more about Auxmoney below). The recently rebranded Younited Credit (FKA Pret d’Union) originated the second highest amount over the quarter with €41m and new boys Twino reported €16m – the third highest total.
Figure 2: Quarterly Continental European Origination Volume
Regular readers of our monthly updates may remember that in January 2016 auxmoney removed its volume counter from its website and stopped providing the market with daily volume updates. Instead auxmoney now provides quarterly origination volume updates. In Q2 2016 auxmoney reported origination of €44m and also cumulative origination of €268m.
This €268m figure is significantly lower than the figure than we had been expecting, the volume counter on auxmoney’s website having been above €400m when it was removed.
We got in touch with auxmoney to find out why and were were told that the counter, which was labelled “Vermitteltes Kreditvolumen” (which translates as "intermediated/brokered loan volume”) actually included loans that had been fully funded by investors but never drawn down by the borrower.
Auxmoney’s new origination figure excludes these loans, only taking into account loans that have been drawn down. This is the definition that we are used to in the UK and the US (albeit even the likes of Lending Club have been said to try to boost this figure).
Raffael Johnen, CEO & co-Founder auxmoney explained further:
“Over the years, credit marketplaces in Germany communicated different key performance indicators on volume. In the interest of transparency and trust in our industry, we as the market leader have decided to communicate the originated volume as the only relevant volume figure. Only origination volume provides value, as it shows the impact of P2P on credit supply to empower people.”
“Therefore, we are pro-actively getting in touch with media, which refer to different key performance indicators on volume, which were used in the past. We encourage all credit marketplaces in Germany to follow our example. We appreciate that AltFi Data shares our standards on transparency and plays an important role for the sustainable trust in marketplace lending in Europe“
Lending performance transparency in Continental Europe is far behind that of the UK and the US. Only one Continental European platform that we are aware of provides loanbook level information. Where platforms do provide lending performance statistics, there are no standard definitions which renders comparison between platforms impossible. We applaud auxmoney in taking a first step towards improving information for investors, a vital step to developing trust in the industry which will in turn facilitate further growth.
Insurance AI & Analytics USA (June 27-28, Chicago) is the only forum bridging the gap between the analytical and data minds and the business transformation leaders. As carriers rush to meet customer demands and deliver continuous business growth without dramatically increasing costs, deploying innovative technologies such as AI, machine learning and advanced analytics can be the only way to remain competitive. But in order to deliver real value to the organization, these innovations must have a real application in the core business areas and directly improve operational efficiency and deliver a seamless customer experience