Twino, a Latvian marketplace lender, has started listing Russian subprime loans from December 1 and is the first lender of this type do so, reports The Wall Street Journal.
The lending model of Twino brings it closer to a payday lender, rather than a classical P2P lender. Instead of matching borrowers with lenders, Twino gives out loans, resells them to investors and takes a cut from the interest. The size of the cut usually depends on the size of the interest.
The Russian loans will pay around 14% annual rate to the investors.
“It’s becoming more and more important for investors to diversify their portfolio,” Twino’s Chief Executive Jevgenijs Kazanins told The Wall Street Journal. According to him, the international sanctions imposed on Russia after the invasion of Crimea in 2014, was “a break” for the company. Kazanins said that the sanctions forced Russian banks to curtail the lending and borrowers started looking for alternative sources of loans.
Initially Twino was simply lending money in Russia, but was not reselling the loans. According to Kazanins this incurred big losses for the company and it had to fine tune its lending model. Eventually, Twino would move up from subprime loans to more creditworthy customers.
Twino launched in Latvia in 2009 under the name Finabay and since then has originated over € 350 million in unsecured consumer loans. In 2015 launched an investment marketplace offering investors premium rates on unsecured consumer loans. The company has lending operations in Latvia, Russia, Spain, Georgia, Poland, The Czech Republic, Denmark and Mexico.