Peer-to-peer (P2P) lending platform Bondora announced on Friday it will make significant changes to the platform, one of which is dividing the system into investor and borrower products.
The P2P lender has already achieved a legal split of the investor and borrower activities, as well. One business will serve investors exclusively and the other will serves only borrowers.
The upcoming change aims to optimize the investor experience. According to the platform operator, improvements in one section of the business inevitably create downstream problems for the other product. A separated system design will solve this issue.
“Next, we’ll complete the disengaging of the two entities from a technological standpoint. In the meantime, we’ll continue to make our regular improvement to the user experience and updates to our core products,” Bondora said in a statement.
The introduction of a system split will result in faster and more precise operations. It will enable fractional calculation of payments and claims, resulting in enhanced liquidity of existing investments and portfolios. Moreover, all this will allow investors to sell whole loan portfolios at once while buyers take a fraction of each loan rather than full single loans. Secondary trades can be priced on a portfolio level, which more accurately reflects the value of high-performing and poor-performing loans.
Estonai-based Bondora is a P2P lending platform that has facilitated the disburse of about €70 million. The average Bondora loan is €2,370, but loans range from €500 to €10,000. Bondora also operates a secondary market for P2P loans where investors can buy and sell their existing investments. Recently, the platform updated its loan pricing system to offer higher return on investment and launched a referral program to bring in new clients and award existing ones.
Bondora is authorized by the Securities and Exchange Commission (SEC) in the US, the Financial Supervision Authority (FSA) in Estonia, and the Regional State Administrative Agency (RSAA) in Finland.