9.4.2019 10:00MARKET OVERVIEW

Market overview

Via Fellow Finance you can invest in peer-to-peer loans in 5 different countries and also in Finnish business loans and invoice funding. We will now take a deeper look into peer-to-peer loans in German market. In future we will give market overviews of all our markets.

Germany Sweden Denmark Finland Poland
Population 82,38 million 10,04 million 5,77 million 5,56 million 38,06 million
Currency Euro (EUR) Swedish krone (SEK) Danish krone (DKK) Euro (EUR) zloty (PLN)
BKT per capita 44 469,91 USD 53 442,01 USD 56 307,51 USD 45 703,33 USD 15 751 USD
Employment percentage 75,40 % 68,10 % 65,90 % 72,10 % 68,00 %
Unemployment percentage 3,3 % 6 % 3,8 % 5,4 % 5,8 %
Average household size 2 2 2 2 3
Average wage 3 516 EUR/mo 3 133 EUR/mo 3 804 EUR/mo 3 175 EUR/mo 1 999 EUR/mo

German market overview

We opened German loan market to our investors in the fall 2017 and the loan volume has grown rapidly over the past months in the service. Loan volumes has risen especially fast after the co-operation that we have with the biggest German loan comparison site Check24. With their help customers have effectively found our service.

We also do co-operation with Wirecard Bank. The co-operation enables us to offer our service totally digitally also to our German customers like in all the other markets. In Germany the customer identification is done with IDNow which is a video identification service or customer goes to a post office for the identification. The official will check identification documents validity, identifier, affirmation date and period of validity and compare the information with the application. IDNow provides to Fellow Finance a picture and video of the identification process. This video identification process is approved by German banking supervision. In the post office customer does a personal identification by physically going there. The post office will then provide the identification document to Fellow Finance. Customers’ payment history and possible payment defaults will be checked from the national credit information system (Schufa).

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Germans as borrowers

German market differs from our other markets. It still has very traditional banking and they don’t really have quickie loans because their regulations. Also applying loan without visiting a bank is still new to many and rarer than for example in Finland or other Nordic countries. Fellow Finance offers possibility to apply loan online easier and faster than what Germans are used to with their banks.

On the other hand we have also noticed that borrowers are also more cautious in general than borrowers in other markets. This is probably partly due to the Schufa. It has all the information about person’s open credits and loans and the payment situation on them and if the register isn’t clean it will cause lots of challenges in everyday life. The purpose of this register is to prevent people from taking excess loans and already the first minor problems will cause the ranking in Schufa to go down. Certain matters will also have negative impact on the Schufa like continues change of banks, great amount of credit cards (even thought these wouldn’t have any open credit), paying bills after the due date, small amounts of cash on the accounts etc. This is why people pay attention to pay the bills on time. This register has great impact on the Fellow Finance’s customer evaluation.

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The interest rate in German peer-to-peer loans is around 8 to 10 % depending on the credit class.

Receivables’ management and collection

Collection of unpaid loans is managed in Germany in co-operation with chosen collection agency. We will send reminders to customers of the delinquencies and try to reach the customer through phone. If these actions aren’t efficient enough to get the customer to pay the loans we will transfer the collection to collection agency and if necessary to collection by legal measures. For now we will not sell the unpaid loans to collection agency.

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Nothing on this page is or can be taken as investment recommendation. There are always risks involved in investing and investor must take these into consideration when making their investment decisions and they need to take into their consideration their own investing goals and their financial situation. Investments’ value and profit may change and there is a possibility to lose the invested capital in total. Historical profit isn’t a promise for future profits. You can read more about risks here.