A guide to European P2P platforms for UK investors
THE UK may boast one of the largest peer-to-peer lending markets in the world, but European P2P lenders are starting to catch up.
Over the past year, the European P2P market has reached a number of significant milestones. In June, Portugal’s Raize became the first European P2P platform to go public, with a listing on the Portuguese stock exchange. This was swiftly followed by the Fellow Finance initial public offering (IPO) in Finland.
This growth is likely to continue, as the European P2P market attracts more and more investors, including some from the UK. Latvia-based platform TWINO said that at the start of 2018, 11.5 per cent of its loan volume came from UK lending, while its UK investors have the largest average portfolio size.
So we thought it was time to take a closer look at the European P2P platforms that are open to UK investors. In alphabetical order, here are some of the P2P lenders operating on the continent.
Bondora
Average net return: 10.8 per cent
Minimum investment: €1 (87p)
This Estonia-based platform has issued more than €158m in loans since it was established in 2009. It specialises in personal loans to borrowers in Spain, Estonia and Finland, and offers a range of different products for investors with returns sometimes surpassing 25 per cent.
However, as the platform has grown, these interest rates have fallen and default rates have started to rise slightly. Some UK investors have also complained about the website’s accessibility, and a lack of clear communication from the platform.
EstateGuru
Average net return: 12.27 per cent
Minimum investment: €50
Another Estonian success story, EstateGuru now has offices across the Baltic countries and in London. The P2P property platform funded its biggest ever loan this year, and recently passed its €80m lending milestone with no losses.
EstateGuru invests in property loans in Estonia, Lithuania, Latvia and Finland with no fees to lenders. As a result, it has become very popular with investors from the UK and beyond.
Fast Invest
Average net return: 14 per cent
Minimum investment: €1
Fast Invest was launched in 2015 with the aim of being a truly pan-European P2P platform. It was one of the first platforms to offer loans in multiple currencies, and it has established a presence in England, Poland, France, Finland, Germany, Lithuania, Spain and Italy. Next year it plans to expand into Singapore and Hong Kong, and its long-term goal is to become a licensed global bank.
Its loans now originate from 36 different European countries, and investors come from all over the world.
Fellow Finance
Average net return: 10 per cent
Minimum investment: €25
In October, Fellow Finance became the first Finnish P2P platform to float on the Helsinki stock exchange, with an IPO worth €55m.
Specialising in Northern European business loans and personal loans, Fellow Finance has facilitated more than €325m since it was founded in 2013. It is now gearing up for a big expansion with the aim of becoming the largest alternative lender in Europe.
Linked Finance
Average net return: 8.5 per cent
Minimum investment: €50
Since its launch in 2013, Linked Finance has grown to become the leading P2P lender in Ireland. In the first nine months of this year alone, the platform facilitated more than €28m in loans – a 63 per cent increase year-on-year.
Over the past five years, the platform has lent to more than 1400 Irish businesses, and it has also managed to expand its investor base by partnering with several pension trustee services.
Mintos
Average net return: 11.63 per cent
Minimum investment: €10
Mintos bills itself as the largest global marketplace of its kind, and it has certainly seen enormous growth since its launch in 2015.
It has funded more than €1.2bn in business loans, personal loans, car loans and other short-term loans over the past three years, and it has a network of almost 90,000 investors in every corner of the world.
Earlier this year, Mintos partnered with its first UK finance provider in a move that will help consolidate its reputation among UK investors.
TWINO
Average net return: 10 per cent
Minimum investment: €25
TWINO has carved out a niche as one of the leading P2P platforms in Eastern Europe. It was the first platform to offer loans in Kazakhstan, and it has claimed a significant share of Russia’s P2P lending market.
The Latvia-based company has funded more than €500m in unsecured consumer loans since it was launched in 2009, although its default rate is slightly above average, at 6.5 per cent. Nonetheless, investors seem largely happy with the highly liquid loan market, average returns of 10 per cent, and the short-term duration of the loans.
