Thanks to rapid development of two financial technologies companies TWINO and Mintos in the past two years, Latvia has become one of the leaders in alternative loan industry among European member states, according to KPMG Baltics study for development trends in alternative loan market in 2016.
«Emerging technologies have made it possible for small countries to compete with big ones. Alternative online loans are one of these sectors where country size and borders do not play a big role. Knowledge and skill in investor attraction and loan issue are far more important. Considering the relatively unexplored market of continental Europe, local loan platforms continue concentrating their activities in European countries, filling niche and heightened risk loan segment. Nevertheless, we can see growing interest of European mutually connected loan platforms to develop outside of Europe,» – comments KPMG Baltics transaction consultation director Julija Masane-Ose.
Thirteen platforms from nine countries currently dominate Europe’s online loan market. Two leading platforms are Younited Credit (France) and Auxmoney (Germany), followed by two loan platforms from Latvia – TWINO and Mintos. Only six of the leading platforms have experienced growth in the first three quarters of 2016. TWINO and Mintos are two of the most rapidly growing market participants. Both Latvian platforms managed to outcompete Fellow Finance and Fixura from Finland and Bondora from Estonia in 2016. The total volume of loans in three quarters of 2016 exceeded EUR 100 million for both Latvian platforms. In 2015, the volume of loans allocated by those platforms was only EUR 15 million.
«FinTech companies and the alternative finance market are a relatively young industry. Nevertheless, rapid growth rates and influences in finance industry show that FinTech industry can change game rules. Latvia stands out in this regard. I am convinced we have an opportunity to become a finance industry centre in Europe,» – believes TWINO investment platform manager Yevgenij Kazanins.
Continental Europe’s alternative loan industry is significantly behind the industry’s leader – UK. Its volume of allocated loans exceeds the volume of countries from continental Europe four times. As noted in KPMG Baltics’ study, it is good news for FinTech companies in other European countries, as it demonstrates major market potential. The total size of Europe’s alternative financial market had reached EUR 5.4 billion in 2015. 81% of that was UK’s market share.