As the European P2P market continues to expand, interest rates tend to go down, according to an update from Robo.cash.
The analysts at Robo.cash platform consider this as certain patterns “that may continue in the long term.”
The European P2P lending market is “growing at an average monthly rate of 2.8% (3.6 M euros).” At the same time, the average rate of return is “decreasing by 0.03 p.p. every month.”
Robocash analysts commented on the statistics:
“There are some deviations in the trend caused by various global events. However, in general, the identified dynamics continue.”
The specialists name a few possible reasons for such market behavior.
One of them is “excessive demand, when a platform can’t provide enough loans for all users, so it lowers the returns to leverage the demand.”
Also, in such a situation, the platform may “resort to financial leverage, such as issuing bonds or taking a bank loan, which may lead to a change in rates.”
The analysts added:
“The bond or loan rate depends on the key rate of the Central Bank. In certain economic circumstances, it may turn out to be very high, and, in order to maintain its profits, the platform will be forced to reduce rates in the short term.”
Another possible factor is “the business scaling issue.”
The experts further noted:
“If the platform has already found the main niche for itself, then it makes no sense for it to keep the rates very high.”
As for the long-term perspective, the analysts predict “further growth in volumes with a decrease in the rates.”
In the short term, indicators “may behave more randomly.”
In other recent updates from Robocash, it was noted that in recent months, the team have been working harder to optimize the website.
And now they are glad to share that they’ve significantly sped up the page loading, “so your experience with the website is more efficient.”
They have launched a new feature called “Portfolio”. It allows you “to transfer money from one portfolio to another when loans close or you get interest.”
In June, the Finfellas P2P conference took place in Riga. They were glad to participate, listen to industry experts and “present the prospect of Asian fintech to the European audience.”