Mintos sees monthly lending fall to €35m
European lending marketplace Mintos funded €35m (£29.5m) worth of loans in July, down from €48.6m in June.
The firm’s latest update revealed around 190,000 loans were funded last month, with investors on Mintos earning around €2.2m in interest at an average rate of 11.8 per cent.
The top three markets for investments in loans were: Latvia, Spain, and Estonia.
“During July, almost all lending companies were transferred to the new regulated investment firm set up offering notes,” said Mintos head of partnerships Peteris Mikelsons.
“Outstanding investments stood at the €330m mark. The supply and demand interaction for notes started to normalize, yet the supply still outpaced the demand, leading to an increase of the average interest rate for notes to 14.5 per cent (in euros).”
This is the second consecutive month that Mintos has seen a dip in lending volumes, having gone from €60.3m in May to €48.6m in June, which the firm blamed on “global bearish markets and low investment sentiment”.
The firm also reflected on the outlook for fintech and the role that digital lenders are currently playing in broadening financial inclusion, as economic pressures from the Covid-19 pandemic, inflation, and rising interest rates create challenges for both lenders and borrowers.
“[Digital lenders] are at the forefront of inclusion initiatives worldwide, especially in emerging and developing economies, by providing services to a significant proportion of first-time, low-income, and female borrowers,” the firm said.
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“During the Covid-19 pandemic in Europe, first-time borrowers accounted for over half of the loan origination values for digital lenders in 2020 alone. And in the same period, female borrowers accounted for over a third of digital loan origination globally. Plus, as traditional banks continue to exclude significant chunks of the global population, digital lenders have been instrumental in supporting the unbanked (people with no access to financial services).”
As such, Mintos expects to see the digital lending sector grow significantly. Citing Future Market Insights, it said the P2P/marketplace lending market is forecast to grow by around 15 per cent per year over the next decade. With the model taking on most of the digital lending to first-time, low-income, and female borrowers.
Read more: Mintos completes transition to regulated notes