Lendermarket monthly Q&A
Narek Vardanyan

Investor Q & A with Lendermarket – June 2021

In this post we have compiled the answers to the questions we have received from our investors via email and Social Media in the past month.

1. How are you handling investors’ money? Do investors have separate accounts in the bank or funds are transferred to the Lendermarket bulk bank account?

The funds are transferred to a Lendermarket’s bank account that is separate from the bank account Lendermarket uses for the purposes of its operations.

2. Number of investors, average account size and a total of loans generated?

Since Lendermarket’s launch in June 2019, the number of investors has reached 2,400 with an average portfolio size of 5,000 euros, making a total of 17M euros of the account value.

3. Why did you choose Ireland for Lendermarket?

Ireland met the regulative criteria that the business development team established while working through various countries. And additionally, what was very important to us – an English speaking environment. As our working language is English within the company, then we preferred to establish the business in the country, where we’ll be able to interact with the regulator directly in English. In comparison with Ireland, the UK, for example, would have proved to be more difficult in terms of the regulative environment. Therefore, ultimately the choice of establishing the business in Ireland came down to multiple deciding criteria.

4. Do I understand correctly that a buyback guarantee is provided by Creditstar? Not loan originators, or both?

We have two types of buyback guarantee. Buyback Guarantee is a risk protection measure to make investing safe. It is a guarantee from the loan originator to the investor for a particular loan to automatically repay the investment and accrued interest when the loan is overdue for 60 days. Buyback Guarantees secure all loans at Lendermarket. Group Buyback Guarantee ensures an additional level of protection. It is a corporate guarantee by Creditstar Group, the parent company of the loan originators, which means that in case of insolvency of a loan originator, Creditstar Group will cover all the liabilities of this loan originator that arise from the Buyback obligations.

5. What does skin in the game mean?

The term “skin in the game” refers to the owner(s) of the principal maintaining a stake when outside investors are solicited to invest. This is to ensure the interests of the originator of the asset are aligned with the interests of the investor, as both sides have a stake in the investment. All loan originators that place loans at Lendermarket are required to keep a certain percentage of each loan to align the interests of investors and loan originators. At Lendermarket, “skin in the game” for loan originators is 5%, then 95% will be available for investors to invest in.

And that’s it for this month! We hope we’ve answered all your questions. If you have other questions, you can find the answers on our FAQ page or contact our Customer Service.

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