Anthedon

What is MPL and what do we do?

Marketplace lending offers borrowers a new way to get funding by connecting them with potential lenders and skipping the middleman.

The very first MPL platform, Zopa, was founded in the UK in 2005. Since then the entire sector has come a long way, and global markets have been shaped by many important events. The financial crisis of 2008 and the more recent global Corona pandemic, have had a lasting impact on the financial markets. In the current environment Banks struggle to effectively provide the much needed liquidity to businesses and individuals. They are slow to react due to the regulations imposed on them and a lack of digitalization. Furthermore the negative interest environment renders the lending business quite challenging. Marketplace lending also sometimes known as p2p lending aims to mitigate these problems. Banks used to take the deposits from depositors and lend them to borrowers. This process is cumbersome and generally contains a considerable overhead, leading to no interest for depositors and high costs for borrowers. Marketplaces offer retail and institutional investors the opportunity to invest into said loans. They assess the risk of the loan in regards to loan originator and duration and subsequently adjust the interest rate. Investors now have the opportunity to invest into those loans. This has the advantage of financing the real economy directly without any middle men having their own interest in mind. What’s more, MPL platforms generally adapt the risk-model algorithms that underpin their credit scoring approach more frequently than banks do (Deloitte). Investors can choose a strategy involving loans that fit their risk profile and interest requirements, while often keeping liquidity.

There is however one very critical issue with this system. Since it’s dawn in 2005 hundreds of loan originators and marketplaces have joined the game. In this vast sea of offers it is hard to find the right marketplaces and loans. Whom can you trust, who does their due diligence, and most importantly where do you get the best offer? For any individual it might be impossible to even scratch on the surface of this complex field. This is where Anthedon offers value. We use technology to our advantage, to analyze this vast sea of offers. Our web crawlers constantly scan marketplaces for the right offers that suit our risk and return profile, and our software evaluates each individual loan to see if it fits our criteria. This way we are able to react to the most minute changes and can minimize risk, while achieving excellent returns, thanks to an unprecedented process of diversification and aggregation.