Fellow Finance obtains institutional support for consumer loans
Finnish peer-to-peer lender Fellow Finance has received new institutional funding for its loans.
Asset manager Dynamic Credit will begin guaranteeing consumer loans on the platform through its diversified credit fund.
“By using our platform, Dynamic Credit is able to access new asset classes to further diversify its investment portfolios,” said Antoni Airkkala, director of investor accounts at Fellow Finance.
“Dynamic Credit is a pioneer in direct lending, which not only makes us very proud to have been selected as a cooperation partner, but their experience as an investor encourages us to offer the best of our platform. “
Read more: Fellow Finance warns of falling profits
Dynamic Credit is a Dutch asset manager with 69,000 clients and € 10.5 billion (£ 8.6 billion) in commitments.
“We are pleased to have joined Fellow Finance as the originator of our diversified loan fund,” said Jorrit van Rijswijk, senior investment analyst for Dynamic Credit.
“Fellow Finance has proven that its sourcing and underwriting capabilities generate attractive returns, and we believe this investment is a good addition to our portfolio. “
This comes from the fact that Fellow Finance said revenue for 2020 was down 22% to € 11.1 million.
This has been attributed to a reduction in lending due to tighter credit criteria amid the pandemic and a rate cap on loans.
Finland’s parliament approved a 10% rate cap on all loans amid the coronavirus outbreak in April 2020.
It was to last from May to the end of December 2020.
The rules have now been extended to loans made between January 1 and the end of September 2021.
Fellow Finance said it still expects revenue growth this year, but could remain unprofitable “due to new product investments and growth for years to come.”
Read more: Fellow Finance breaks loan record in January