In the last year, in the ever-growing alternative financing market in Europe, Lithuania together with other Baltic countries remark very positive results in the crowdlending sector. After four years of operating in the crowdfunding market, this sector in Lithuania has given loans worth about 92 million euros or 31 thousand loans - this can be further seen in the Profitus review where trends among the Baltic countries are compared.
Although in Lithuania in 2018 crowdfunding platforms accounted for only 0.59% of the whole borrowing market and it is clearly behind when compared with Latvia and Estonia, alternative lending is becoming more important in the market. During the first three quarters of 2018 (January - September) alternative borrowing platforms gave out loans worth 1.1 milliard euros. It makes up more than 8% of the whole worth of loans given in that same period in the Baltic region (banks and credit unions lent about 12 milliard euros).
The biggest impact on such growth was made by the friendly investment environment, politics of finance that ensure great conditions for investors who are interested in alternative investing.
According to the data of the Bank of Lithuania, at the end of the last year, 170 Fintech companies were operating. Most of them were specialising in the financial payment sector (44%), companies in the lending market were in the second place (15%), and companies operating in the banking sector and using blockchain technology were in the third place.
The investing in RE expert and the founder of crowdfunding platform Profitus, Viktorija Vanage, says that tendencies we have seen until now, give us expectations that due to the complex and consecutive the Bank of Lithuaniapursuits for financial technologies, crowdfunding will become more popular in the next year. 'Regulated and supervised environment, improving knowledge regarding alternative financing, strict and usually unfavourable conditions to borrow in the banks and credit unions, especially for real estate development, are evident aspects to affect the popularity of alternative financing. In both Lithuania and other Baltic countries, the number of platforms suggesting these services and the number of loans is increasing'.
The complete portfolio of financed loans by the market pioneers (platforms created in 2015 - 2016), on average grew by 200%. The financial results of borrowers using crowdfunding platforms are also better. During the year, the revenue on average doubled, while the expenses, compared to the revenue, decreased.
'In the review made by Profitus, annual interest suggested by crowdfunding platforms for investors borrowing their money in the Baltic countries is also evaluated'.
The expected annual interest in Lithuania for investors is between 8 - 30% (the expected average annual interest rate for usage loans is 17%, business loans and loans for RE development - 11%).
The tendencies stay similar in other Baltic countries. The typical annual interest promised by platforms' operators is from 7 up to 25%, depending on the loan type (business lines of credit, loan for RE development or other business loans) on average is 14% per year.
You can download the review here: https://www.profitus.com/review2018
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