Blockchain P2P lender launches institutional funding vehicle
PEER-TO-PEER business lender Bitbond has partnered with an asset management group to launch a dedicated fund for institutional investors.
The fund, set up with 1741 Fund Management, enables professional investors to access a diversified portfolio of small business loans that are originated through the Bitbond small- and medium-sized enterprise (SME) lending platform.
Bitbond uses blockchain technology for payment processing, which it says makes the platform – and its users – independent of banks. The firm, which is regulated in Germany, has funded more than 2,300 loans worth €6m (£5.3m) since launch in 2013.
Borrowers can access loans of up to $25,000 (£17,673) starting at one per cent interest a month and can have their business revenue validated using online services such as PayPal, eBay and Amazon rather than traditional credit scoring.
Lenders funding the loans can receive returns of up to 13 per cent and can either build their portfolio manually or automatically.
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“Direct debt investments into SME loans and other types of business-to-business debt financing are becoming an increasingly popular asset class,” a Bitbond statement said on Wednesday.
“Since such assets usually have amounts approximately in the €1,000 to €200,000 range, institutional investors need to set up structures which make these assets investable for them.
“1741 Fund Management set up an open-ended investment fund incorporated in Liechtenstein to make investing into SME loans via Bitbond accessible to any kind of institutional investor.”
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