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Smava launches as the first international P2P lender in Poland

Smava, a German social lending site, announced its official launch in Poland today.

Social lending (or p2p lending), for those unfamiliar with the concept, involves people lending money among themselves with intermediation of an Internet portal like smava.

In Poland three such sites operate already, and all of them started activity last year. I wrote about them after bootstrap meeting, roughly at the time when all three were launching, and then I organized a research between Accenture and Gemius to have some insight into how the Polish Internet users like this idea.

There is no doubt that P2P lenders like the Polish market, though, since very few countries have four players, like we now have after Smava opened.

How Smava wants to differentiate itself? I noted the following:

  • Conservative risk policy. They seem to have rather strict loan granting procedures. Scoring model was developed (and will be maintained) by BIK, the credit office. Documents and employment information are verified
  • Automatic and free of charge (from what I understood, updated: free of upfront fee) collections procedure. Other sites also claim to have collections, but perhaps it does not work as well as advertised
  • Anonymity. The parties don’t need to know each other unless collection procedures need to be launched. This would make me feel better as investor. Other players were missing this one when we compared them mid last year
  • Quantification of expected risk for the investor. Meaning one can see expected cost of risk based on borrower’s risk rating. This functionality was highly emphasized though I cannot verify how better it is that competition

Other features of the service seem in line with the market. Smava’s vice president Arek Hajduk told me, though, that the platform Germans have is 2-3 times more complex that the ones he had seen before. Arek is a P2P veteran who was launching social lending startups in Denmark (Fairrates) and in Canada (IOU).

Smava’s target group are “good” banking customers. People with poor risk profiles will be rejected and not allowed to use the site.

Down payment for mortgage was quoted as one interesting market niche, and recent experience that my mother had seems to confirm that this is an opportunity. Even if loan term of only 36 months might make the installments quite high. Banks started to demand down payment recently, and people often end up missing 10-20k euros to close their deal.

Business model is based on the fees. Borrower pays 1% of loan amount after loan is granted, investors do not have to pay. There was some discussion at the conference if the fees are not too low to built a sustainable business. Nevertheless, Smava wants to reach break-even point within three years.

What are Smava’s chances on the market?

Hard for me to say since I don’t follow it very closely. Everyone at the conference was taking shots at Monetto, the site which a year ago was boasting to have the most secure platform. They launched late, apparently raised the expectations too high, and failed to deliver. Perhaps Smava can take their place as the “high end” P2P player. Finansowo, on the other hand, is a rather different niche, more “social” than “lending”. That leaves us with Kokos, the third player. I don’t know how well they are doing.

Smava says that financial crisis didn’t reduce the loan volume in Germany, in fact it actually increased, so that shouldn’t be a problem.

Works on smava started in March 2008, and took about 6 full time programmers to finalize. Makes me a little bit uneasy about my 3-months, 1-non-programmer startup, but hey, they probably didn’t work seven days a week.

I wish Smava best. I would consider them for the time when I will have burnt all the money for startuping, but probably their advanced risk procedures would not let me in (if they are any good).

Kokos will cooperate with Allegro

Kokos, one of the social lending sites in Poland, announced that it started cooperation with Allegro, the dominant online auction player (through antyweb).

According to the research that we did (Accenture and Gemius), this is a rather promising idea for Kokos – Allegro is the top site that potential borrowers actively use (i.e. visit at least once a week):

(there is similar data for potential investors, among which Nasza Klasa has better penetration)

The full report will be public shortly, also in an English version.

P2P lending on bootstrap – notes

Between burger and an ice cream in Hard Rock Cafe I jotted down notes from today’s bootstrap. I needed them in electronic form anyway. I wrote down stuff which seemed useful for me, so it’s not guaranteed to be complete.

This time it was in an unusual for boostrap form of a panel. Meeting took 3 hours, but I found it very interesting. Technical people might beg to differ, though, as tax/legal discussion was really exhaustive (exhausting).

I made some comments below in the notes, but here I can also share my “first impression” of the P2P lenders present. It is really first impression because I didn’t bother to check them myself, so some doubts below might be result of this.

  • Finansowo – approach to start as simple as possible, no collections or support in executing transactions between peers. The biggest risk is that some things that they ignore seem critical (collections).

  • Monetto (blog)- most advanced approach, ensured partners from the beginning, including bank (mBank) and collectors. The biggest risk is that they start with a very complicated machine that no-one will use.

  • Kokos – midway between the two, with the advantage that it is already up and running.

On a first glance I like Finansowo and Monetto, because they follow clear-cut concepts of simplicity and exhaustiveness, while Kokos was less clear, at least as much can be judged from the presentation, and also takes cautious approach regarding some legal challenges (e.g. possibility to grant anonymity and stick to electronic contract form).

(read more…)