LenderMarket – Deep Dive
Overview
Established in 2019 by Creditstar, a renowned international finance company, and founded by Aaro Sosaar, Lendermarket is a dynamic online lending marketplace with its headquarters in Dublin, Ireland. Specializing in offering investment opportunities in loans issued in countries like Estonia, Finland, Sweden, Spain, and Denmark, LenderMarket’s primary mission is to facilitate seamless funding processes by connecting investors with lenders. Since its inception, the platform has earned the trust of investors from over 72 countries, amassing an impressive total investment of €336 million. Additionally, LenderMarket has successfully attracted more than 17,000 registered users, marking its growth and reach in the financial marketplace.
Key advantage of the platform
LenderMarket’s primary advantage is its comprehensive buy-back guarantee on all loans listed on the platform. This guarantee ensures that investors are reimbursed by the loan’s issuing financial company in the event of a default. Moreover, loans issued by financial companies that are part of a larger group benefit from additional security, as they are backed by their respective holding companies. This multi-layered security approach provides enhanced assurance and risk mitigation for investors on the platform.
Track records
No available data
Investment opportunities
Lendermarket is a lending marketplace platform that connects investors with financial companies seeking financing to provide credit to retail individuals.
The minimum amount to invest into LenderMarket’s project for investor is 10 €
| Loan: ES-2820642111 | Loan: FI-4091412514 | Loan: PL-1109132549 | |
| Loan amount | 250.00 € | 300.00 € | 228.70 € |
| Term days | 360 days | 30 days | 30 days |
| Date of issue | 20.10.2023 | 18.10.2023 | 17.10.2023 |
| Loan lender | Creditstar Spain | Creditstar Finland | Creditstar Poland |
| Interest rate | 16% | 15% | 15% |
| Loan Status | Current | Current | Current |
| Final payment | 14.10.2024 | 17.11.2023 | 17.10.2023 |
| Guarantee | This loan has a Buyback Guarantee. | This loan has a Buyback Guarantee. | This loan has a Buyback Guarantee. |
| Available investment | 192,89 € | 255 € | 217.26 € |
All the loan originator offers an investor Buyback Guarantee which means they commit to repurchasing loans from investors in case of borrower default. However, if the loan originator can’t meet its guarantee, a Group Guarantee is enacted with the parent company stepping in to cover these obligations. It’s important to note that not every loan originator has a parent company established.
Investing process as a retail investor
- Account Creation: The first step for investors on LenderMarket is to create an account, providing necessary personal and financial information like name, surname, email, and phone number.
- Exploring Investment Options: Investors can then explore various investment opportunities on LenderMarket. Each project is detailed comprehensively, including information about the loan originator, the investment, and the LenderMarket risk score, aiding in due diligence.
- Making an Investment: After reviewing investment details, investors can choose to manually select loans or use the Auto Invest portfolio strategy, customizing their investment criteria with the platform’s filters and options.
- Investment Tracking: Post-investment, LenderMarket allows investors to track the progress of their investments through their accounts, providing regular updates on the projects.
Team and management
LenderMarket is under the guidance of a team of financial and managerial expert who have demonstrated a consistent history of achievements and success.
Aaro Sosaar Fouonder of LenderMarket
Aaro Sosaar is a prominent entrepreneur in the financial services and technology sectors, and an active investor. He is the CEO and Founder of Creditstar Group AS, a fintech group offering consumer financial services across eight European countries. Additionally, Sosaar founded Lendermarket, a global online peer-to-peer investment marketplace. His involvement extends to investing in early-stage startups. Academically, Sosaar holds a BSc in Banking and International Finance from Bayes Business School in London and has participated in Executive Education Programs at Columbia Business School in New York.
Carles Federico, CEO of LenderMarket
Carles Federico currently serves as the CEO of Lendermarket since September 2023. Prior to this role, he was the Head of Business Development at Coolbet from April 2021 to September 2023. Federico also held the position of Country Manager at Creditstar Group AS for over five years. His previous experience includes working as a Key Account Manager at Adcash® Advertising Technology, a Lead in Business Planning at Skype, an Event Manager & PR at the Spain-US Chamber of Commerce, and a Sales Team Lead at BMW. Academically, he holds a Bachelor of Business Administration from Lappeenrannan teknillinen yliopisto and Universitat Pompeu Fabra, with studies in International Management and Marketing at Johannes Kepler Universität Linz.
Mission and Values
LenderMarket is committed to being a trusted intermediary, streamlining the funding process between investors and lenders. Their mission centers on providing a reliable platform for customers to broaden their investment portfolios with a variety of opportunities. Emphasizing values like transparency, fairness, innovation, and customer focus, LenderMarket ensures that information is accessible, treats all users equitably, and supports a superior user experience with 24/7 customer assistance. This approach highlights LenderMarket’s dedication to fostering trust and delivering value to its users.
Trustfulness of the platform
Key investors of the company
| Creditstar | |
| Asset Management amount | 235,8 million € as at 31-12-2022 |
| Date of creation | 2006 |
| Founder | Aaro Sosaar |
| Website | https://www.creditstar.com/ |
Institutional lenders
There aren’t any institutional investor using the platform to invest on private credit.
Licenses
Lendermarket is not regulated by a financial authority and acts as an intermediary.
Fees and charges
Investing through Lendermarket is completely free of charge. Lendermarket does not charge any fees for opening an account, depositing or withdrawing funds. LenderMarket generates interest when borrowers repay investors. This interest is a result of the borrowers’ repayment of the principal and the associated interest on the loans.
Liquidity and exit options
The LenderMarket platform lacks a secondary market, therefore Investors must retain their loans until they reach maturity and are unable to sell their investments through the platform.
Users feedback
| Trustpilot | |
| Average rate | 3,4/5 |
| Good review | I had a very positive experience using the LenderMarket platform. It’s simple and effective, with numerous promotions and minimal delays in receiving payments. The returns are quite impressive; my average yield is at 15.80%. LenderMarket is a highly reliable investment platform, and I appreciate its user-friendliness, attractive returns, and excellent customer service. It’s an excellent choice for those seeking profitable financial growth, and I wholeheartedly recommend LenderMarket. It’s a serious and trustworthy P2P platform with rewarding returns and excellent communication. Just be prepared for occasional payment delays. The interest rates are very appealing, and there’s a bonus redemption guarantee. The automatic investment feature is adjustable according to your preferences. I recommend it |
| Bad review | Since really big part of Lendermarket operations depends on Creditstar I would like to warn everyone before investing here. Lendermarket seems to be juggling with tricks to cover that Creditstar has no money, probably because people are currently simply not able to pay back their loans.(For example they plan to introduce feature allowing people to “reinvest” the payments which they haven’t got yet..) I am now past the moment when many loans have been extended six times. I have almost all of the loans in around 30-60 days overdue for many many months now and the so called pending payments (delayed payments from loan originators) in thousands. I haven’t seen a single payback for many weeks now and am just waiting for everything to collapse at any time. To be honest, I’ll be damn surprised if it does not collapse. I see CEO change(s) also as a bad sign. Accustomed to loan platforms, I started a test on Lendermarket and am very disappointed. After 7 months, 23 of my short-term (micro) investments which have already matured for at least 4 months have still not closed and no interest on these investments appears.Worse still, the overall panel has – sometimes – delays of 30 days, sometimes delays of 60 days, then overnight these delays disappear and then come back. It’s not serious at all.It is better to contact Mintos for example or another service provider. |
Risk Analysis
Investors using this platform should be conscious of specific significant risks and grasp the platform’s risk management strategies to safeguard their funds.
Credit risk
Borrower default risk
LenderMarket effectively manages borrower default risk through a detailed due diligence process, using a credit scoring system to assess loan originators. Originators are rated on a scale from 1 to 10, with 1 indicating higher risk and 10 indicating lower risk. The assessment is based on four main criteria:
- Transparency (10%): Assesses the public availability of financial and non-financial information.
- Legal (20%): Covers regulatory compliance and management’s integrity and performance.
- Financial (30%): Evaluates underwriting quality and financial stability indicators.
- Transactions (40%): Reviews the enforceability of agreements and the accuracy of loan transactions.
Platform risk
Operational risk
LenderMarket emphasizes top-tier security, incorporating bank-grade protocols across all systems. The platform adheres strictly to data protection laws, employing rigorous technical and physical measures to safeguard personal data against any form of compromise. Compliant with GDPR, LenderMarket ensures the utmost respect for user privacy and data rights. Notably, even when processing data outside the EEA, LenderMarket employs additional safeguards like EU Standard Contractual Clauses. Data retention is carefully managed in line with legal and business necessities, sometimes extending up to ten years. Furthermore, the platform enhances data security with Two-Factor Authentication (2FA) and maintains the confidentiality of borrower information for security and regulatory compliance.
Regulatory risk
LenderMarket, currently operating as an intermediary without direct regulation by a financial authority, disclosed in its 2021 annual audit report an intent to pursue a European Crowdfunding Service Provider (ECSP) license. However, as of now, there is no confirmed proof of compliance or regulatory approval for this license. This situation places LenderMarket in a unique position within the regulatory framework.
Platform failure
LenderMarket ensures financial transparency and accuracy through regular third-party audits conducted by Grant Thornton. The auditing firm has validated the authenticity and precision of LenderMarket’s financial statements for 2021, confirming a true and fair representation of the company’s financial status. This practice reinforces the credibility of the financial information disclosed by the platform. However, it is noteworthy that LenderMarket has not publicly disclosed specific measures for business continuity to safeguard against unforeseen disruptions, an area that could benefit from greater clarity for customer assurance.
Liquidity risk
LenderMarket requires investors to retain their loans until maturity, as the platform does not currently offer a secondary market for selling positions. This setup necessitates investor awareness regarding the inherent lack of liquidity when committing to investments on the platform. Understanding this aspect is crucial for investors to align their investment strategies with their liquidity needs.
Fraud risk
Borrower fraud
LenderMarket employs a robust credit scoring system to evaluate loan originators, ensuring borrower reliability. This process includes requiring borrowers to submit various documents, such as financial statements and details of loan administration processes, to assess their efficiency and the quality of both internal and external reporting. However, it is important to note that LenderMarket does not publicly disclose specific instances of fraud or their resolutions. This lack of transparency could potentially create a sense of uncertainty among investors regarding the platform’s handling of borrower fraud risk.
Platform fraud
While LenderMarket implements various security measures, the inherent risk of fraud remains a consideration, as the platform holds and manages investor funds. This scenario presents the potential for unauthorized access or misuse of funds by platform managers. Additionally, LenderMarket does not currently provide public information regarding past instances of fraud on the platform, which might be an area for enhancement in terms of transparency and investor reassurance.
ESG risk
Currently, LenderMarket’s approach to Environmental, Social, and Governance (ESG) criteria is not extensively detailed in the public domain. The limited availability of ESG-related information suggests an opportunity for the platform to enhance its transparency and commitment to these important aspects of modern investment practices.
