We transform digital lending into bankable products
In our last blog post (“What is MPL and what do we do”) we described the general function of Marketplace Lending (“MPL”) / “Digital Lending” as it has recently been referred to more often (for terminology in Digital Lending check out our blog post “MPL terminology: what you need to know”) and how we can be of value to professional/institutional/qualified investors1.
In this blog post we will give you a short insight and background on how we transform Digital Lending into bankable products and take reference to our newest product - the “Short-Term Marketplace Lending Note”.
The rise of Digital Lending
“Peer-to-Peer-Lending”, “Marketplace Lending” or “Digital Lending”, which is a unique part of the private debt sector, is a fast growing area - both in terms of volume and players involved. There are hundreds of Marketplaces and Loan Originators all over the world and every year the number keeps growing. Also in Europe we observe a constant and rather fast rise of new players on the loan issuing side (Marketplaces and Loan Originators). However, not only the number of Marketplaces and Loan Originators is growing but also the amount of investors - today mainly retail investors2- is constantly rising.
This (new) financial area of Digital Lending is a good opportunity for retail investors as an alternative for a savings account to generate a stable income in today’s low interest markets. Recently we observed that this (new) financial area has become a rather attractive new asset class for professional investors as well - some Marketplaces even stopped offering to retail investors and only focus on professional investors (e.g. US-based Marketplace called “LendingClub”).
Digital Lending for professional investors
Although professional investors are already able to invest in Digital Lending today, if they want to do so in a larger and more diversified and thus risk-minimised way, they are faced with an overwhelming amount of manual work. Also, as Digital Lending per se is not a financial product and has neither a Valor nor an ISIN, it cannot be booked and updated automatically into the securities portfolio of professional investors.
Our solution - bankable products
This is where we jump in. We’ve digitized not only the investment side of our business but also the fund collection process in a way that allows professional investors to purchase our financial products - which have their own Valor3 and ISIN4 - via their own securities portfolio.
We have created a solution for professional investors wherein we got rid of all the manual work which is associated with investing in Digital Lending and which can be easily booked into any professional investor's securities portfolio - like any other financial product with Valor and ISIN such as a Bond or Fund Share or Company Share.
Our “Short-Term Marketplace Lending Note”
Our first bankable product for professional investors in Digital Lending is the “Short-Term Marketplace Lending Note”. The Prospectus of the Note has been approved by the Financial Market Authority of Principality of Liechtenstein (“FMA”).
A Note is a debt security and has similar features like a Bond - in which investors (Noteholders) receive interest payments and are repaid the original amount invested (the principal) at a future date. A Note typically has an earlier maturity date than other debt securities, such a Bond.
For this Note, we specifically select and aggregate from a pool of worldwide Marketplaces and Loan Originators these Marketplaces and Loan Originators which we deem a good fit for this product. Thus, the Lending Note aggregates multiple digital Marketplaces and Loan Originators, whereas the granular underlying loan portfolio is comprised of small size private credit assets such as loan parts of SME loans, invoice factoring, agricultural loans, loans to private individuals (e.g. car loans, personal loans) and loans secured by real estate (mortgages).
Being a bankable product, this “Short-Term Marketplace Lending Note” can be seen as a fixed income-like financial instrument that seeks to achieve competitive risk-adjusted returns in the digital lending area. Further details about the Lending note can be found in the Factsheet and in the FMA-approved Prospectus. Also on www.anthedon.li there are many more interesting insights.
Having said that, the Note as a bankable product is only our beginning...
Key _Takeaways:
1. Bankable Products with Valor and ISIN (for professional investors)
2. Diversified investments into Digital Lending
3. Digitized approach - no more manual work
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1 for the sake of simplicity “professional investor(s)” is being used when referring to professional/institutional investors according to art. 4 Swiss Financial Services Act respectively qualified investors according to art. 2(3) Regulation (EU) 2017/1129 in connection with Annex II Directive 2014/65/EU.
.2 For the sake of simplicity whenever referring to “investors in Digital Lending” or “investing in Digital Lending” it is meant acquiring and selling of loan and loan parts on the Marketplaces.
3 Valor is a Swiss securities identification number for the unique identification of a security.
4 ISIN is an international securities identification number for the unique identification of a security.
Legal Disclaimer
Neither the content published in this blog post nor any opinion expressed herein constitutes a solicitation, offer or recommendation (i) to buy, sell or otherwise acquire or dispose of any investment, (ii) to engage in any other transaction, or (iii) to provide any investment, legal and/or tax advice or service or (iv) to conclude any legal act. All information contained in this website is for informational purposes only.
Any investment decision must be based on an analysis of the risks (including any legal, regulatory, tax or other consequence) related to the investment as well as on the relevant and specific advice of an independent professional. Before subscribing to or otherwise acquiring any Note, prospective investors should thoroughly examine the entire Prospectus and specifically ensure that they understand the structure of, and the risk inherent to, the Note and should specifically consider the risk factors set out under the section "Risk Factors" in the Prospectus.