A more efficient way
Yann Murciano, chief executive of Blend Network, explains how a passion for efficiency led him to the world of peer-to-peer lending…
THERE are a lot of reasons to get involved with the world of peer-to-peer finance: the higher interest rates; the innovative technology; the opportunity to help businesses and households. But for Yann Murciano, chief executive of Blend Network, the number one reason was a desire to drive efficiency in the property lending sector.
“As an investor, when I looked at the property market I thought something wasn’t right,” he explains. “A lot of people were struggling to access money, and on the other hand a lot of people with cash were looking for yield. There was a clear need for a solution that would make the market more efficient.”
The result was Blend Network, a P2P property-secured lending platform that has already exceeded Murciano’s own expectations, less than a year after its official launch. Murciano says his goal was to exceed £5m in loans within the platform’s first year in business, and just 10 months in, the company is already set to surpass that figure.
Since Blend Network arrived on the scene in January 2018, it has won over a multitude of investors, and was recently selected as one of the UK’s top 10 fintech companies by the Mayor of London’s TechInvest fintech showcase.
The platform has not had a single default to date, and lenders have been rewarded with a minimum of 10 per cent in interest (and as much as 15 per cent in some cases). Furthermore, by targeting lower-value properties outside of London, Blend Network has been able to help first- and second-time buyers to find a new home despite a national shortage of affordable housing.
“The problem is that once you go outside the main cities like London and Manchester, there are far fewer lenders, if any,” says Murciano. “I wondered why. I looked into it and I don’t think that those markets are any riskier, it’s just that there’s no need to build 200 properties in a small village with a population of 20,000. However, there is a need to build five new houses and 12 apartments.
“Most funders have a big amount of capital – they’re not interested in funding loans for £250,000 or a couple of million only. They won’t get out of bed for less than £10m.
“So the only solution that’s worth looking at is alternative lenders like P2P because these investments are more flexible.”
Blend Network specialises in properties at the lower end of the pricing scale. Murciano himself invests in every loan listed on the platform, but not until the company’s underwriters have visited the sites and performed an enhanced due diligence process. Blend Network’s developers are “high quality guys,” says Murciano, who just so happen to be in an under-serviced part of the market.
“In P2P one can find loans that are offering lower returns with little or no security,” he adds. “We don’t believe the interest rate is a good representation of the risk in P2P. We are focused on getting great risk/reward loans.”
Murciano knows that the P2P market in the UK is competitive but also recognises that each platform offers a different product.
As a former senior investment banker, he is more than able to select great investments. “I welcome the competition,” he says.
As the UK’s P2P property market heats up, Murciano is confident that his commitment to market efficiency will not only benefit Blend Network, but the entire property investment sector at large.
Click here for more information on Blend Network.