The market of Alternative Lending

Jeroen Bakker from Cervus Capital Partners shares his view on the market of Alternative Lending.

The fact that banks do not focus on certain niche areas anymore leads to an increase of alternative lending.  Certain parts of SME financing, mortgage lending, consumer and buy-to-let lending are examples for this. To cater for these niche markets, banks would have to invest too much in processes, a cost not offset by the volume of the business. Smaller, alternative lenders can set up these processes more efficiently, reason why traditional banks leave for example the buy-to-let market to these parties.

Domivest is originator/lender in buy-to let loans for residential properties in the Netherlands. It provides loans based on the value of the property and the rental stream it can generate, not based on the income of the borrower. As banks do have this restriction, Domivest provides financing to parties not covered by these traditional banks. It has a speedy process and has a very transparent product, which enables it to outsource part of the process.

We expect automation to lead to improvements of the process for Domivest but also for other alternative lenders, enabling us to provide clients with an even faster answer to their financing request. Traditional banks typically have older and less integrated software systems, making this automation step more costly and less efficient.

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Geplaatst op: 17 oktober 2018