Millicom, MTN and Rocket Internet’s Africa Internet Holding (AIH), a leading startup builder in Africa, has today launched Lendico in South Africa, a person to person online marketplace for loans to enable investors to directly fund the loans of private individuals.
For the analysis of the loan applications the company utilizes an algorithm that classes loan projects in real time. At Lendico, affordable loans and attractive returns are not mutually exclusive: “We have high standards when it comes to selecting borrowers, because we always have the interests of our investors in mind. Due to our cost advantage, Lendico can offer more affordable interest rates and smaller loan sums that for banks usually are not worthwhile“, says co-founder of AIH Jeremy Hodara,
“Lendico has been developed as a digital alternative to banks“, says the Managing Director of Lendico Dominik Steinkühler.“ Lendico is very different from a bank as borrowers and lenders benefit from direct interest rates. Lendico as a global marketplace represents a modern way to get a loan and to invest in a new asset class.”
In South Africa, the volume of outstanding consumer credit balances is $150 billion (R1.49 trillion). The costs associated with a loan are extremely important to consumers. Even one percentage point less means $1,5 billion (R15 billion) more in the pockets of consumers. This transformative power of the p2p model can already be witnessed in the United States. In 2013 alone, the two most important providers of p2p loans procured $2,4 billion worth of loans – a growth of 177% compared to the previous year.
The Africa Internet Holding also runs JUMIA, Zando, Kaymu, Hellofood, Lamudi, Carmudi, Jovago and Easy Taxi which are all spreading across Africa and nearly into market leading positions.
Jeremy Hodara: “We feel it is now the perfect time to expand our focus and vision into the digitalizing finance sector by providing Africa with financial alternatives in order to further support the emerging market’s economy.”
South African borrowers will get loans easily by creating a loan project on lendico.co.za, wait for their credit worthiness to be analyzed and then wait for investors to bid with as low as $35 (R250) or more. If a loan project gets fully funded, the borrower receives his or her loan. Investors receive their respective principal and interest payments from the first month. By diversifying their portfolio across several loan projects, investors can earn higher returns in comparison to similarly secure investments.