The Swiss Marketplace Lending Association hosted the Swiss Marketplace Lending Conference for the very first time. The online conference took place on 21st September 2021 and provided exciting insights into the marketplace lending sector. The blog briefly reviews the speakers’ conference presentations.
Welcome and Presentation of the Swiss Marketplace Lending Report 2021
Andreas Dietrich and Simon Amrein, Institute of Financial Services Zug IFZ and Swiss Marketplace Lending Association (SMLA)
- The significance of platforms is evident when analysing the 10 most valuable companies around the world. 7 out of the 10 companies follow a platform-based business model.
- In the financial services sector, substantial market shares of platforms can be observed in certain areas. The market share of mortgage brokers in Germany, for instance, is 45%. In France, the market share is 65% and in the United Kingdom 75%.
- Swiss market volumes in the marketplace lending sector are growing rapidly. In 2020, the issued volume was CHF 15.4bn. The annual volumes have almost tripled since 2017.
The Swiss Marketplace Lending Report 2021 provides an extensive overview of the Swiss marketplace lending market (available here).
Introduction to the Swiss Market and Panel Discussion: Challenges for Swiss Lending Platforms – COVID-19 and Beyond
Rafael Karamanian (Session Chair, Partner at Lendity and Vice President SMLA), Stephan Boos (Head Legal & Compliance, CG24 Group), Florian Kübler (CEO and Co-Founder, Lend), Alwin Meyer (CEO and Co-Founder, swisspeers)
- Even though the COVID-19 crisis hit the economy, the marketplace lending sector has passed the stress test. Returns remained stable with low default rates.
- Business activity among platforms has been increasing again in the last months. However, during the first wave of Covid-19, the market came to a halt due to the Swiss government’s loan programme, providing loans at 0% interest.
A Global Perspective on Marketplace Lending
Tania Ziegler, Head Global Benchmarking at Cambridge Centre for Alternative Finance
- The Global Alternative Finance Market (excl. China) has shown significant growth of 157% since 2015. With around USD 35bn in 2020, P2P/Marketplace Consumer Lending is by far the largest business model in the alternative finance market.
- Institutional investors also seem to have recognized the benefits of marketplace lending. The share of institutional investors has increased substantially compared to 2019. P2P/Marketplace Business Lending, for example, recorded a 91% share of institutional investors in 2020 (compared to 70% in 2019).
- The Global Benchmarking Report is available here. For complete market coverage for Switzerland, please consult our Marketplace Lending Report 2021.
The Involvement of Banks in Lending Platforms and the Role of Ecosystems
Matteo Bernardoni, Head Lending Platforms, UBS Switzerland AG
- The first platforms in Switzerland’s online mortgage space entered the market about 10 years ago. Key4 by UBS, which offers mortgages for self-occupied real estate, was launched in June 2020.
- Swiss pension funds currently invest about 3-4% in mortgages. From a regulatory standpoint, pension funds could allocate up to 50% of their assets to mortgages. The potential of pension funds as investors is therefore substantial.
- The actual market share of online mortgages is around 4%. However, 34% of all Swiss customers are willing to purchase mortgages online, underlining the high potential for mortgage platforms.
An Investor’s Perspective: Institutional Investors and Their Experience with Marketplace Lending
Erich Bonnet, CEO, Smart Lenders Asset Management
- Their Moonstone Lending Fund recorded Assets under Management of 360 million USD by the end of August 2021. The fund is the largest marketplace lending fund in continental Europe and has a 6.34% net IRR (p.a.) since inception (USD share class).
- The asset class (loans) as such is simple, but difficult to access. Moreover, due diligences of platforms, as well as scoring and monitoring, require a lot of specialized knowledge.
- The asset class is very sensitive to the macroeconomic cycle but has a low correlation to other asset classes.
