What is Paskoluklubas about?
NEO Finance is the leading P2P lending platform „Paskolų klubas“ in Lithuania. The platform is an intermediary for consumer loans connecting lenders directly with borrowers. We believe that fintech company should be not only innovative, but also professional. This is why we gathered a strong team of senior experts from the banking sector with the expertise in consumer lending, bank management and risk control. Currently all of “NEO Finance” activities are supervised by the Bank of Lithuania due to obtained e-money license, P2P license and as a consumer lender status, to ensure that responsible lending criteria is enforced.
We have a unique platform that we developed our self to fit the needs of our investors. NEO Finance offers buyback and provision fund services, which minimizes risk for lenders. Moreover, partnership with Legal Balance, UAB enables platform’s users to experience the benefits of 7+ years of delinquent loans recovery know-how.
By transferring money to “Paskolu klubas” account investors deposit it into e-money IBAN account under their own name and hold all of the money under their control till the investment is made.
Our main goal is to ensure a sufficient supply of loans are listed in the primary market, so that our investors can cherry-pick the loans adequate to their investment strategy.
What are the three main advantages for investors?
Provision fund service. By voluntarily paying a provision fund fee, more conservative investors can be secured from delinquent or defaulted loans. If a borrower is late with the installment, provision fund immediately covers that installment. The fund holds largest amount of proceeds to cover late payments in the Baltics and holds more than 100 000 EUR at the moment.
Buybacks. Investors, who did not choose the provision fund service, can sell defaulted investments to “Paskolu klubas” for 50-80% of its face value. Instead of waiting for a relatively long recovery process they can reinvest their money into other loans.
Higher interests rates of return. In Lithuania, we operate in market of higher interest rate. Currently our average interest rates are as fallowed for each of the credit rating: A – 13 % B – 17% C – 20%. This creates opportunity for investors from all over the Europe to receive higher returns.
What are the three main advantages for borrowers?
Lower fees for borrowers. As our fees are one of the lowest for borrowers, therefore half of the borrowers choose “Paskolu klubas” loan as an alternative for a bank loan.
Possibility to get an instant loan. Since we developed in-house state-of-the-art IT platform ourselves we can offer unique features for borrowers and investors. One of them is instant loan service. Investors can set up their automatic investment tool and borrowers can see what amount they can borrow at what rates, as the system collects all automatic investment orders starting with the lowest rate and building it up to meet the needs of a borrower. This feature enables investors to invest their capital faster.
No upfront fees. Unlike other platforms Paskolu klubas does not charge upfront fee from borrowers. Borrowers do receive the exact amount they borrow. Platform fee is deducted from the payments, this way we take the risk together with investors and are able to offer barrows flexible barrowing.
What ROI can investors expect?
10-18% after taxes. One investor did an experiment with 4000 EUR initial deposit. Half of the investments were made using a provision fund service, 5 defaulted investments were sold to NEO Finance and some investments were sold in the secondary market with premium. ROI after exactly 1 year was 14% after taxes.
Is the technical platform self-developed?
Yes, this allows us to add various new features and to fit the needs of both – investors and borrowers. We are not only the peer to peer platform, but also a fully licensed e-money institution. This enables us to operate as an online bank with IBAN account numbers and SEPA MMS payments.
Evaldas RemeikisHow is the company financed? Is it profitable?
The company is financed from shareholder’s equity. It is not profitable yet, but we are in operation for only one and a half year. Our current goal is market penetration and market share.
What were/are the main challenges in the Lithuanian market?
When preparing for the launch, we spent a lot of time carefully analyzing Lithuanian and foreign markets. “Paskolu klubas” shareholders and employees have a lot of experience in the financial sector, we also cooperate with the best partners and agencies. This helped us to be prepared, therefore none of the challenges were unexpected.
One of the more significant challenge was financial literacy. Potential investors were not introduced to peer to peer lending before. Therefore, we started an event and training cycle where we educate investors about pros and cons of peer to peer lending.
You launched the company for residents of Lithuania quite some time ago. What prompted you to open up for international investors and launch an English version of the website right now?
From our experience, we knew that establishing consumer loan brand in a market takes at least a year. We focused our effort on becoming the number one platform in Lithuania for the past 18 months, but had strategic plans to open our platform to international investors from the beginning. Currently we can supply enough of quality loans for international investors.
Another reason was it took time to acquire full e-money license. For this we had to make sure we meet international anti-money laundering requirements and international identification requirements. Only after establishing processes, developing the system and meeting those international requirements we are ready to offer opportunity for international investors.
Which marketing channels do you use to attract investors and borrowers?
For investors, we mostly use educational channels where we try not only to advertise, but also to educate people about investment opportunities. In 2016 we organized over 30 events for our investors. We also use partnership of different financing experts who can provide feedback on our platform and receive bonuses for the investors they bring in.
Moreover, word of mouth perfectly works for us, because we have many satisfied investors, who are sharing their experiences and helping us grow.
For the borrowers, we have fully integrated marketing campaign. We use all traditional and digital channels. We invest in brand building and acquiring quality borrowers. This helps us to acquire valuable borrowers, who are worth to invest in.
Where do you see Paskoluklubas in 3 years?
We see Paskolu klubas as a global player in P2P lending sector. We may establish borrowing sites in other countries, but we will localize it as we did with Paskolu klubas in Lithuania. We see advantages of strong brand in each country we operate for borrowers. We are currently on a path of fast growth and we are not looking to slow it down. Our goal for next few years is to be the number one platform for investors in the Baltic states.
Investors can use the Paskoluklubas referral code P2PBANKING when registering and get 10 Euro for their first investments.