Fellow Finance secures institutional backing for consumer loans
Finnish peer-to-peer lender Fellow Finance has received new institutional funding for its loans.
Asset manager Dynamic Credit will start backing consumer loans on the platform through its diversified loan fund.
“By using our platform, Dynamic Credit is able to access new asset classes to diversify their investments portfolios even further,” Antoni Airkkala, director of investor accounts at Fellow Finance, said.
“Dynamic Credit is a pioneer in direct lending which not only make us very proud of having been selected as their co-operation partner but their experience as an investor encourages us to deliver our best as a platform.”
Read more: Fellow Finance warns of lower profits
Dynamic Credit is a Dutch asset manager with 69,000 clients and €10.5bn (£8.6bn) of commitments.
“We are happy to have onboarded Fellow Finance as an originator for our diversified loan fund,” Jorrit van Rijswijk, lead investment analyst for Dynamic Credit, said.
“Fellow Finance has proven that their sourcing and underwriting capabilities generate attractive returns, and we believe this investment is a good addition to our portfolio.”
It comes as Fellow Finance reported turnover for 2020 was down 22 per cent to €11.1m.
This was attributed to reduced lending due to tighter credit criteria amid the pandemic and a rate cap on loans.
The Finnish parliament approved a rate cap of 10 per cent on all loans amid the coronavirus outbreak in April 2020.
It was due to last from May until the end of December 2020.
The rules have now been extended to loans made between 1 January and the end of September 2021.
Fellow Finance said it still expects revenue growth this year but may remain unprofitable “because of investments in new products and growth for the upcoming years.”
Read more: Fellow Finance breaks lending record in January
