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Building Towards a Truly International Marketplace

After having recently caught up with the folks behind continental peer-to-business lender Zencap, we decided to sit down with another Rocket Internet-fuelled platform – the consumer lending outfit Lendico.


Lendico was the first peer-to-peer lender to be spun out by the prolific German company-constructor that is Rocket Internet. Focused on lending to consumers, the platform has already established a global presence – with branches in 6 different countries spread across both Africa and Europe. Lendico is one of the few peer-to-peer platforms in the world to facilitate cross border transactions – whereby lenders in, say, Germany have the capacity to access deals originated in a range of international markets. Indeed, Dominik Steinkuehler – Managing Director of the company – identifies cross-border investment opportunities as essential to the long-term success of the marketplace lending sector.

We staged an interview with the Lendico boss to find out more.

Please explain a little about Lendico and its background.

Lendico pioneers in international marketplace lending and operates on two continents. With an advanced technology-supported underwriting system, Big Data scoring solutions and risk-adjusted loan pricing, locally-tailored for each individual country, Lendico offers competitive rates to both borrowers and investors. Since its launch in December 2013, our Peer-to-Peer marketplace has penetrated 6 country-markets and acquired over 150,000 customers.

Which of the international markets - bar Germany in which you initially launched - most excites you?

At the moment, Germany is our main focus and we are very excited about our development and success here. Looking ahead, we believe in emerging economies. Since Lendico’s launch and through our entries into 6 country-markets, we have gained invaluable experience and know-how that will prove advantageous in our future geographical strategy.

Tell us about the P2P space in South Africa - is the industry picking up traction with local borrowers and lenders?

South Africa is not a typical rapid-growth market like the UK. Payday loans are more popular and the majority of our efforts include educating the consumer about online lending marketplaces as a financial alternative. We are currently leading the market and for the future the growth prospects of the consumer loan market are bright. We will be ready and have accumulated the necessary market insights when demand takes off.

What are the primary challenges of cross-border investment?

For every country we add to our cross-border investment portfolio we have to set up legal models and pricing schemes that are locally tailored and make sure to adhere to the different tax regimes. Different countries have different regulations that we have to follow. We believe however, that international cross-border lending is a vital precondition needed for the long-term success of online marketplaces. Offering cross-border investments has so far been one of our most important and gratifying strategic moves. We will continue to expand our horizons and extend our international lending capabilities.

Do you see a need for a diversified product set, or will Lendico continue to focus on consumer lending for the time being?

The consumer loan market is estimated to be around $12 trillion so there is still enough growth opportunity for us. Now operating in six countries, we have access to a potential market share of $800 billion in consumer loans alone, which we will focus on digging into deeper. However, over the long term, our vision is to position Lendico as an integrated provider across several products, asset classes and geographies, all on one single platform.

The P2P industry is famed for its transparency - how important is it for the various platforms to uphold that reputation?

Very important. Lendico was launched on the premise of offering full transparency to our customers. Unlike traditional banks, we want our customers to feel safe and informed about every part of our business: the pricing scheme, the full costs of a loan, the potential risk associated with an investment, the people behind it and our plans for the future. We are also keen on raising awareness that current levels of returns to investors might become more volatile. We haven’t seen a full credit cycle yet in many markets.

Do you see the European peer-to-peer industry catching up to the UK market in terms of transactional volumes and sophistication?

Not anytime soon. The European Peer-to-Peer industry is significantly behind the UK’s in its quality as well as public trust and awareness. It required a lot more time and effort to establish the existing Peer-to-Peer market in Europe than it has in the UK. Now that we have developed a substantial amount of trust, we believe that market traction is likely to follow. This will not take place in the near future though. While the UK regulators take a very supportive view of the industry, other countries seem to focus on protecting established banking structures.

Where do you see the platform in a year's time?

Our target for 2015 is to become the largest online lending marketplace in Germany, Austria and the Netherlands. With the rate at which we have been growing since our launch, we envisage achieving most of our ambitious goals within the year 2015. We will seize potential market opportunities as we see fit and continue to increase our customer base globally. We will remain innovative, employ the latest technologies available and continue to adapt quickly and stay in tune with our customer’s needs and expectations.

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