Limit on investments in loans by NEO Finance AB changed
In light of increased loan requests on the NEO Finance marketplace and seeking to fund them more rapidly, a decision was made to increase the limit on NEO Finance AB’s investments in loans effective 20 May 2022.
Until now, NEO Finance AB was able to finance up to 50% of the amounts of all loans listed on the platform. As the supply of loans grows and noting slower funding of loans on the marketplace, it was decided to increase NEO Finance’s AB investment limit to 80% of the original amount of the consumer credit. The process for funding loans rated A+, A and B remains unchanged: when a loan appears on the marketplace, NEO Finance AB may invest up to 50% of its original amount immediately, with the remainder covered by other investors. But if a loan rated A+, A or B is not fully funded within 48 hours, NEO Finance AB retains the ability to finance an additional 30% of the original amount of the consumer credit.
NEO Finance AB will be able to invest in loans rated C or C- only when other investors finance at least 20% of the loan amount and at least 48 hours from the date of the borrower's application for consumer credit to the market period has passed. These changes will help put investors’ money to work faster and speed up the funding of loans.
“The amount of loans financed via the platform has been growing sharply in recent months, and since investors have a bigger choice on the marketplace, some loans are getting funded more slowly. In response to this situation, we take steps to ensure a good borrower experience and more efficient handling of their applications. This is a win-win solution – investors’ money will be put to work faster and borrowers will get their loan faster. This will give for the platform an even greater advantage in the market, attracting more borrowers and offering investors more investment opportunities,” notes Indrė Krasovskė, who heads the team at the platform.
As until now, when a loan is funded by NEO Finance AB, that can be seen on the marketplace beside the loan’s listing date. Loans financed by NEO Finance AB are marked with the company’s logo.