Lending

Lend.ch New Peer-to-Peer Crowdlending Platform for Switzerland

Lend.ch (LEND) is a new Swiss peer-to-peer lending platform that aims to modernize the consumer lending market by allowing investors and borrowers to meet directly and ditch banks as intermediaries.

LEND, a registered financial intermediary and a trademark and service of Zurich-based Switzerlend AG, provides a crowdlending platform for private loans that allows borrowers to benefit from fair interest rates (~5-9% compared to 12%, the current average interest rate for consumer loans in Switzerland) and investor from better returns.

“Traditional banks dominate the Swiss consumer lending market, with its annual volume of CHF 4 billion. Crowdlending is growing rapidly and the market is ready for transformation,” the company claims.

“It is time for fair interest rates and better returns, no real need for banks as intermediaries.”

Here’s how it works: borrowers fill out the credit request online and upload all necessary documents; LEND then runs its proprietary underwriting process, validates all information, and only if the request passes the strict criteria, the company publishes the request on the platform.

Credit projects can be financed by multiple investors, who are free to place small amounts in various projects.

When a loan project gets successfully funded, investors transfer the relevant amount to LEND which then pays out the loan amount to the borrower. LEND sends out all invoices and handles all amortization payments which are split and transferred to investors, making sure all payments are made on time.

The platform makes money by charging borrowers an annual fee of 0.75% of the total loan amount for the entire period of the loan. Investors on the other hand, are charged an annual fee of 0.65% of their total investment.

All LEND borrowers are insured against death, disability and unemployment as the result of a collective insurance policy LEND has brokered with Helvetia. However, for investors, LEND doesn’t guarantee that the loans you’ve invested in will be effectively reimbursed and a complete loss of investment is a possibility. Invest at your own risk.

The founding team – Tom Stierli, Michel Lalive d’Epinay, Florian Kübler and Andy Siemers – brings a combined 50 years of banking experience. These four entrepreneurs are experts in consumer loans, financial market regulations, Internet technology and asset management.

Two of LEND’s founders, namely Michel Lalive d’Epinay and Florian Kübler, are also the founders of Splendit, Switzerland’s first crowdfunding platform for student loans that launched in November 2014.

LEND, which is currently financing 10 projects, will soon be open to the public. The company said it is looking to raise its first round of funding and is currently seeking investors.

Swiss crowdfunding market getting crowded

The addition of LEND to the rather extensive list of Swiss crowdfunding players, comes at the time when the market is experiencing rapid growth.

In 2014, Switzerland’s crowdfunding market experienced an impressive 36% growth. The peer-to-peer lending, or crowdlending, segment experienced the highest growth rate with 95%, according to a report from the Institute of Financial Services Zug IFZ of the Lucerne School of Business.

Experts predict that the industry will grow further as peer-to-peer lending, reward-based crowdfunding and crowddonating are becoming widely popular.

As of April 2015, it was estimated that 30 platforms had offices in Switzerland. Popular Swiss crowdlending services include Cashare, CreditGate24, We Can Fund, and Veolis.

Image credit: Hand receiving money by Kritchanut, via Shutterstock.