Africa Internet Holding (AIH), an African startup builder, announced today the launch of Lendico in South Africa. Lendico is the digital alternative to banks that enables investors to directly fund the loans of private individuals.
Launching in South Africa, the NCR-approved Lendico marketplace now offers borrowers cheap loans and investors attractive returns on two continents. Lendico was launched in Germany in December 2013 – Spain, Poland and Austria followed.
The idea of social lending is universal: People with money invest in the projects of people looking for funding. One party benefits from attractive returns, the other from cheap interest rates. Lendico is a win-win situation that functions all over the world: without bank counters and with an innovative new process, Lendico is able to beat the prices of banks and pass these savings directly on to their borrowers and investors.
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.